Creation of Vibrant SMEs for Defence Corridors

Abstract: It is in the strategic interest of a nation aspiring to be a regional power to develop an indigenous and internationally competitive defence industry base. Presently, India is one of the largest importers of conventional defence equipment. According to government statistics, roughly 60 percent of India’s defence requirements are met through imports. India has the potential to emerge as a global platform for defence research, manufacturing, supply chain sourcing, software development, and offsets, with the right kind of policy interventions. The Small and Medium Enterprises (SMEs) sector is critical for the success of these flagship initiatives, especially the ‘Make in India’, as a massive number of ancillary units for large manufacturing plants come from this sector. With the increasing technological intensity of defence platforms, expectations for a self-reliant India can be met from the SMEs, provided they can graduate to become reliable suppliers for the defence supply chain and become a source of innovation. This can happen with the right kind of policy intervention and implementation to overcome the woes of the past and to address the new challenges of a “knowledge-based economy”, manifesting in industry through a revolution termed as Industry 4.0.

Disclaimer: The original policy research—covering India’s defence SME ecosystem, Industry 4.0 demands, and defence corridor strategy — is published in the CLAWS Journal, Summer 2018.

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