One of the key objectives of the government’s Make in India initiative is to bring micro, small and medium enterprises (MSMEs) into the defence supply chain and thereby boost the self-reliance of the country and contribute towards growing defence exports market. MSMEs are already contributing in defence manufacturing with thousands of quality products, mainly at sub-system and component levels. In addition, as much as fifty per cent of the manpower is engaged in MSMEs.

It is high time that such measures are adopted that would help to create an enabling environment to utilise the potential of MSMEs in the defence sector to the maximum. Therefore, last year, it was proposed to create a scheme for the promotion of MSMEs.

Objectives.

• To unlock the potential of non-defence sector MSMEs located in Tier II and Tier III cities across India by providing them with relevant information about the government’s Make in India programme in defence
• To give a new impetus to the development of defence production in the country for its domestic needs and also for exporting to friendly countries by involving MSMEs in larger numbers
• To provide the know-how to Indian MSMEs active in non-defence sectors for their entry in the defence sector through workshops and conclaves
• To tutor MSMEs about the prospective market and business opportunities around the world
• To enable institutionalisation of the interaction of foreign OEMs (original equipment manufacturers) with MSMEs to encourage wider participation in the offset business industry

Scope.

• MSME vendors to be imparted awareness and information about opportunities emanating out of the Defence Procurement Procedure, and more specifically out of the new Make II procedure
• MSMEs from non-defence sectors to be connected with OEMs, defence public sector undertakings (DPSUs), and ordnance factory board (OFB) to help them avail the opportunities under Make in India programme in the defence sector
• MSMEs to be educated about the relaxations in the procurement process
• MSMEs to be familiarised with the various funding mechanisms established specifically for facilitating capable entrepreneurs low on capital or for capital intensive projects
• Exploring the possibility of establishing common testing and allied facilities at select centres

Coverage.

• Boost Make in India, consolidate existing defence manufacturing ecosystem, and induct competent MSMEs of other sectors to the defence sector
• Identify location-specific problems that need to be addressed by the Ministry of Defence (MoD), particularly, Department of Defence Production (DDP)
• Identify MSMEs with strong potential to meet the technology requirements of the armed forces.
• Promote defence exports
• Boost MoD outreach

Eligible agencies. Under this proposal, the management of the proposed events can be through DEO, leading think tanks, industry associations, local industry chambers, NSIC, or any entity as may be recommended by the department of MSMEs.

Criteria for sanction. The factors to be considered for the assessment include proposed coverage in terms of the catchment area, number of MSME units, range of defence items/equipment targeted, potential outreach of the proposing agency, geo-demographic potential of the region, and extant infrastructural facilities.

Funding. Annual sponsorship subject to a maximum limit of 0.2 million rupees/event (for national-level events) and 0.10 million rupees/event (for state-level events) along with permission to use the logo of MoD from DPP. Since finance ministry had approved one national level and three state level conclaves in pilot mode, fund requirement up to September 2019 was estimated to be 0.50 million rupees.

Source: https://www.defenceexim.gov.in