Defence, Aerospace Exports Increase By Rs 12,815 Cr In Five Years: Govt

The defence ministry informed Parliament on Monday that foreign procurement in the defence sector increased to Rs 50,061 crore in 2021–22 from Rs 37,030 crore in 2017–18, painting a mixed picture of exports and imports.

At the same time, defence and aerospace exports increased from Rs 4,682 crore to Rs 12,815 crore.

Advances in innovation

The ministry informed the legislature on Monday that the “Innovations for Defence Excellence” or “Innovations for Defense Ecosystem” has made good progress (iDEX).

The iDEX programme was introduced in April 2018 to encourage innovation and technological advancement in the defence and aerospace sectors by involving a variety of industries, including MSMEs, startups, individual innovators, research and development (R&D) centres and academia.

The defence ministry reported that “under iDEX, 233 problems have been opened, 310 start-ups engaged and 140 contracts signed.”

According to a written response from the defence ministry, an additional “iDEX Prime” framework has been introduced under iDEX in 2022 to support startups with grants-in-aid up to Rs 10 crore, enabling the development of high-end solutions.

The MoD reported that 366 defence-related businesses have received a total of 595 industrial licences as of October 2022.

The value of indigenous defence production for the fiscal years 2020-2021 and 2021-2022 is Rs 84,643 crore and Rs 94,846 crore, respectively, according to the MoD's response to a question on indigenisation on Friday.

The MoD cited the creation of two Defence Industrial Corridors (DICs), one in Uttar Pradesh and the other in Tamil Nadu, as a means of realising Aatmanirbharta (self-reliance) and the “Make in India” objective.

According to the MoD, six nodes have been chosen for the construction of the Uttar Pradesh Defence Industrial Corridor (UPDIC): Agra, Aligarh, Chitrakoot, Jhansi, Kanpur and Lucknow.

In a similar vein, five nodes have been identified for the development of the Tamil Nadu Defence Industrial Corridor: Chennai, Coimbatore, Hosur, Salem and Tiruchirappalli (TNDIC).

A total of 105 Memorandums of Understanding (MoUs) with industries have reportedly been signed, with a potential investment value of Rs 12,139 crore, according to the Uttar Pradesh (UP) government. Already, UPDIC has received investments totalling Rs 2,422 crore.

A total of 1,608 hectares of land have been purchased for UPDIC development.

The Tamil Nadu government claims that plans have been made through agreements such as memorandums of understanding for a potential investment of Rs 11,794 crore by 53 industries. Already, TNDIC has received investments totalling Rs 3,847 crore.

For the development of TNDIC, a total of 910 hectares of land have been purchased.

Board of the Ordnance Factory

The former Ordnance Factory Board (OFB) was divided into seven new defence public sector undertakings (DPSUs), which were incorporated as government companies (wholly owned by the central government) under the Companies Act 2013 in October 2021.

The government has taken action to help and support these new defence companies, according to the MoD's Friday statement in Parliament. As compensation, the outstanding indents of the OFB were grandfathered and changed into deemed contracts worth roughly Rs 70,776 crore for the following five years.

These deemed contracts include annual goals for product delivery. According to the terms and conditions outlined in the deemed contract, the Services shall pay the new DPSUs an advance of 60 per cent of the amount related to each year's target each year.

Public sector initiatives for the military

The advances give the new DPSUs working capital for expanding their clientele, including exports to increase the volume of defence production. Through communication with Defence Attaches at Indian embassies and missions abroad, the DPSUs are looking for export opportunities.