Boosting MSME Participation In Defence Sector: Defence And Technology Expo Returns To Chennai For Its Second Edition

Chennai is gearing up to host a three-day Defense and Technology Expo 2023, aimed at boosting the involvement of medium, small, and micro enterprises (MSMEs) in the Indian aerospace and defense sector.

This event, dubbed the 'Transforming India Edition 2.0' is scheduled to run from September 3 to 5.

Organised by the Swatantra Foundation, a Chennai-based think-tank, in association with the Federation of Industry and Management Association (FIMA), this marks the second edition of the first-ever private sector defense expo in the country, which was held in Chennai last year.

Minister of State for Defense, Ajay Bhatt, will be the chief guest at the expo, organised in collaboration with the Tamil Nadu Industrial Development Corporation (TIDCO) and the Department of Defense Production (Ministry of Defense).

According to the organizers, the key objectives of this expo are to support MSMEs in entering the aerospace and defense sector of the country and promote the indigenization of defense equipment.

Additionally, this expo aims to support the development of the Tamil Nadu Defense Corridor and explore opportunities for Indian companies to engage in joint ventures and investments with foreign companies.

It will also assist foreign companies in finding potential joint venture and collaboration partners in India.

The upcoming event promises to unite numerous MSMEs and major Original Equipment Manufacturers (OEMs), such as the Defence Research and Development Organisation, under one platform, fostering meaningful interactions.

In addition to the exhibition and seminars, the event will facilitate numerous Business-to-Business meetings aimed at fostering collaborations. These meetings will provide MSMEs with the opportunity to gain insights into the specific needs of OEMs and present their products as viable solutions.

In the previous edition of the expo, approximately 500 such meetings took place, and this year, it is anticipated that this number will double, reaching an impressive 1000 meetings.

The recent emphasis by the Government of India on Atmanirbharta or self-reliance in defense production has created significant opportunities for private sector companies in the defense R&D and manufacturing sector.

In fact, in this year's capital procurement budget of 1.63 lakh crore, the central government allocated more than 75 per cent to local industries, up from 68 percent last year.

Various reforms and schemes launched by the Ministry of Defense (MoD), such as the Technology Development Fund (TDF) and the iDEX (Innovations for Defence Excellence) challenge, have enabled small startups and MSMEs to develop advanced high-tech products.

The four positive indigenisation lists launched since 2021 are also contributing to the creation and strengthening of local supply chains for various high-tech equipment.

This intense push by the government for Atmanirbharta has finally started to yield results. This year, the value of defense manufacturing by Indian local industries crossed the 1 lakh crore mark for the first time.

It stands at 106,800 crore, marking a rise of 12 per cent over FY 2021-22.

Moreover, contracts worth more than 7,000 crore were signed with local industries by the Indian Army alone to counter the Chinese, utilising the emergency powers of Rs 300 crore granted to the Vice Chief of the three services.

The organizers state that this upcoming second edition will "motivate Industry—Academia—DRDO—Armed Forces—Financial Institutions to collaborate to expedite indigenization, and with support from the end users (Armed Forces), engage in innovation."

"This will be a unique partnership with financial Institutions like banks coming in and support a consortium of MSMEs with Research & Proto Type support from Academic Institutions, DRDO providing Technology and other support, Armed Forces providing usage details to help go in for innovation and Industries can form a consortium to meet up not just sub-system but system level development," they added.