NEED FOR A COMPLETE DEFENCE ECOSYSTEM

G RAJ NARAYAN argues why the government should have a holistic integrated approach for Atmanirbharta of MSMEs

- G RAJ NARAYAN

The present Government of India has taken a few bold steps over the last few years to encourage and support Indian private sector industries in meeting the needs of the Indian armed forces. There has no doubt been many success stories of large as well as small companies who have risen to the occasion and delivered sophisticated indigenous defence equipment with completely Indian IPRs. However, considering the highly complex geopolitical situation, developing around India in the recent past, self-reliance in sophisticated defence requirements needs to be pursued with utmost urgency and vigour.

Any survey conducted among defence MSME supply chains would show that most are unhappy and dissatisfied with the lack of sustainable business in spite of successful indigenisation of parts, assemblies and complete equipment. On the other hand, the Government of India announces that 'exports' of defence products have increased manifold with even MSMEs contributing to it. This raises many questions, some of which are

Any survey conducted among defence MSME supply chains would show that most are unhappy and dissatisfied with the lack of sustainable business in spite of successful indigenisation of parts, assemblies and complete equipment

1. What is the real indigenous content, taking into account the indigenous content at all stages of the entire supply chain, of our defence exports? Out of this, what constitute labour content, wholly Indian parts and assemblies and IP? What is the MSME contribution in this whole chain? This data may show up many surprises one way or the other. If the indigenous content is higher than 70 per cent, it proves the maturity of Indian enterprises and we should be able to ramp up our exports in good measure over the next few years. On the other hand, if our indigenous content is only 40 per cent or less, we may only be sales and marketing agents for foreign OEMs through a re-packaging process.