List of Products Manufactured by Indian MSMEs in Defence Sector

Recently, the defence sector of India has undergone a tremendous evolution, and Micro, Small, and Medium Enterprises (MSMEs) play a central role in transforming this new sunset. Such enterprises have blossomed into the backbone of India’s defense equipment manufacturing ecosystem, contributing significantly to India’s self-reliance in defense production. 

The article focuses on the role of Indian MSMEs in the component manufacturing of the defence equipment sector and also aims to understand their contribution, challenges, and the variety of products they manufacture.

The Rise of MSMEs in India’s Defence Sector

A Growing Presence

There has been enhanced participation of MSMEs in India’s defence sector in recent years. By 2022, nearly 10000 MSMEs will be directly involved in the future of India’s defense production. New paradigms of innovation open such as the South African defence landscape and future changes in historic competitors into the strength of India’s position as the world’s largest defense producer.

Also Read: MSME and Its Importance to the Economy

Initiatives by the Government for Growth

Policies and programmes initiated by the Indian government majored in home-grown designs, development, and manufacturing of defence equipment. These initiatives aim at promoting self-reliance in defence manufacturing and technology. Some of the key initiatives are:

• Defence Acquisition Procedure (DAP) 2020: Prioritizes procurement of capital items from domestic sources.
• Positive Indigenisation Lists: Enumerating 411 items for the Services and 3,738 items for Defence Public Sector Undertakings (DPSUs) to induce production in the country.
• Simplification of Industrial Licensing: Streamlining processes plus extended validity periods.
• FDI Liberalisation: Allows an automatic route for investment up to 74%.
• Inventions for Defence Excellence (iDEX) Scheme: Aims to encourage and guide start-ups and MSMEs for driving the innovation process in defence.
• SRIJAN Portal: It is an indigenisation platform for the Indian industry, including MSMEs in defence manufacturing.

All these have made an environment conducive to MSMEs and the manufacturing industry to innovate, design, and produce state-of-the-art solutions for India.

Also Read: MSME Business Ideas for Startups

Key Areas of MSME Contribution

MSMEs have participation in various aspects of defence equipment production. These include:

• Weapons and Ammunition
• Fighter Aircraft Components
• Helicopter Parts
• Missile Systems
• Warship Components
• Submarine Parts
• Armoured Vehicle Components
• Radar Systems
• Communication Systems
• Surveillance Equipment

 Also Read: Opportunities for Indian MSMEs in Defence Supply Chain

Notable MSMEs in the Defence Sector

Many MSMEs have had huge breakthroughs in defence manufacturing. Some such examples are as follows:

1. Logic Fruit Technologies

This facility develops advanced embedded solutions in high-performance computing. Logic Fruit Technologies is all about innovative designs and technology. They provide complete solutions for multiple high-speed digital protocols and communication buses.

2. Bharat Dynamics Limited (BDL)

Not a wholly micro, small, or medium-sized enterprise, but BDL works with lots of smaller enterprises. It has been in the business of making guided missile systems and allied equipment for the Indian Armed Forces.

3. Bharat Electronics Limited (BEL)

BEL is a leading defence electronics firm in India, developing sophisticated electronic defence equipment systems for the Indian Armed Forces. Their primary fields of focus are radars, communication electronics, and weapon systems.

4. Tata Advanced Systems Limited (TASL)

Tata Advanced Systems Limited is part of the Tata Group, focusing on aerospace, defence electronics, and other high-tech defence solutions. They partner up with foreign defence companies and innovate their perspectives on defence.

5. Paras Defence & Space Technology Limited

For 40 years, Paras Defence & Space Technologies has played an important role in defence and space in India. This company focuses on excellence in R&D and state-of-the-art manufacturing.

Related Article:-  MSME Business List for Startups

List of Products Manufactured by Indian MSMEs in the Defence Sector

MSMEs in India are engaged in manufacturing several defence components and products. Here is an exhaustive list of some salient items:

1. Sarvatra Kavach: A Portable an all-weather, modular bullet-resistant jacket.
2. Individual Underwater Breathing Apparatus: It is needed for special operations in the Navy.
3. LED-based Taxi, Landing, and Navigation Lights: Used for aeroplanes and naval vessels.
4. Communications Systems: Radios, antennas, and satellite communication equipment are also among the systems.
5. Electronic Warfare Systems: Jamming devices and countermeasure equipment.
6. Optical and Electro-optical Equipment: Night vision devices, thermal imagers, and laser range finders.
7. Composite Materials: In the structures for aircraft and naval vessels.
8. Precision Machined Parts: Weapon systems as well as various platforms.
9. Hydraulic and Pneumatic Systems: For aircraft, tanks, and other military vehicles.
10. Special Coatings: Radar absorbers and anti-corrosion coatings.
11. Components for Uninteresting Aerial Voyager (UAV): Airframes, propulsion systems, and control units.
12. Components of Ammunition: Casing, fuse, and propellant.
13. Personal Protective Equipment: Helmets, body armor, and protective suits.
14. Field medical equipment: Portable medical devices and first-aid kits.
15. Tactical Gear: Backpacks, harnesses, and load-bearing equipment.
16. Vehicle Components: For military trucks, armored personnel carriers, and tanks.
17. Navy Equipment: Pumps, valves, and shipboard systems.
18. Aerospace Components: Fasteners, brackets, and structural elements for aircraft.
19. Missile Components: Guidance system, propulsion piece, and warhead casing.
20. Radar Components: Antenna elements, waveguides, and signal processing units.

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Challenges Faced by MSMEs in Defence Manufacturing

Some challenges concerning growth and potential are as follows:

• Financial Problems: Most of the MSMEs still suffer from a lack of prospective needs, and that is a barrier for most of them.
• Payments: Part of that efficiency will not enable most of the entities to run smoothly.
• Technical Expertise: The technical requirements of defence products really go beyond some MSMEs.
• Complex Methods of Acquisitions: The security acquisition process is very much twisted and intimidating, especially for smaller companies.
• Regulatory Compliance: Quite a hurdle for smaller-sized companies is crossing the minefield of guidelines.
• Larger Competition: The smaller entrants are facing stiff competition from larger established defense manufacturers.
• Advanced Technology Access: This entire universe of rapidly changing defense technology has easily become too much for many smaller firms.
• Export Regulations: These include measures restricting exports, limiting the international market opportunities for MSMEs.

Government Support and Future Prospects

Government of India has recognized the importance of MSMEs in building a sound defence manufacturing ecosystem. Multiple initiatives aimed at promoting these entities are:

• Budget Provision: The Union Budget FY24 earmarked Rs 1,500 crore for start-ups and MSMEs as part of the total allocation under procurement through domestic private industries.
• Innovation Schemes: Innovation for Defence Excellence, Technical Development Fund, and Make Project of Defence Acquisition Procedure 2020 are the flagship programs that promote innovation by MSMEs.
• Inclusion in the Annual Network Supply Chains: This is introduction of outreach programs across the country in specific schemes for favoring the Indian MSMEs in defence.
• Ease of Doing Business: Reduction of processes and regulations, reducing the duress for defence MSMEs, is being worked on.
• Capacity Building: Initiatives aimed at imparting technical knowledge and assistance will be extended to MSMEs on choosing the correct equipment for their manufacturing.

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The Road Ahead

Indian MSMEs are poised for a bright future in the field of defence. The government has set a defence production target of USD 25 billion by 2025, along with an export target of USD 5 billion. Therefore, the role of MSMEs is going to be even more important. The future order placement opportunity in an estimated USD 138 billion Indian Defence equipment sector over the upcoming 10 years is indicative of a vast landscape for MSME growth and innovation.

This potential must be tapped through focused efforts at addressing funding gaps, regulatory compliance, and strengthening technical capabilities. With the innovation and expansion in the product range, these MSMEs are bound to play an increasingly vital role in the country’s journey toward self-reliance in defence manufacturing.

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FAQs: MSMEs in India’s Defence Sector

1. What is the role of MSMEs in India’s defence manufacturing ecosystem?
   MSMEs in India play a crucial role in the defence sector by manufacturing components for weapons, vehicles, aircraft, and surveillance systems. They contribute to self-reliance under the Atmanirbhar Bharat initiative and support indigenous defence production.
2. How many MSMEs are involved in the Indian defence sector?
   As of 2022, nearly 10,000 MSMEs are directly engaged in India’s defence production supply chain, offering innovation, component manufacturing, and technological support across platforms.
3. What government schemes support MSMEs in defence manufacturing?
   Key schemes include Defence Acquisition Procedure (DAP) 2020, iDEX, SRIJAN portal, Positive Indigenisation Lists, and FDI liberalisation policies, all of which aim to promote indigenous development and MSME participation.
4. What are some of the key defence products made by Indian MSMEs?
   Indian MSMEs manufacture missile components, UAV parts, radar systems, electronic warfare systems, bulletproof jackets, aerospace fasteners, and communication devices, among other high-tech defence items.
5. What challenges do MSMEs face in the defence sector?
   Common challenges include limited access to capital, delayed payments, technical expertise gaps, regulatory compliance issues, and complex acquisition procedures that hinder smooth entry into the defence supply chain.