Ministry of Defence
azadi ka amrit mahotsav g20-india-2023

VALUE OF INDIGENOUS DEFENCE PRODUCTION

Posted On: 16 DEC 2022 3:27PM by PIB Delhi

The value of indigenous defence production for Financial Years 2020-2021 and 2021-2022 are Rs 84,643 crore and Rs 94,846 crore respectively. To achieve ‘Aatmanirbharta’ and realise the goal of ‘Make in India’, Government of India has established two Defence Industrial Corridors (DICs) in the country, one in Uttar Pradesh and other in Tamil Nadu. Six nodes viz. Agra, Aligarh, Chitrakoot, Jhansi, Kanpur and Lucknow have been identified for developing Uttar Pradesh Defence Industrial Corridor (UPDIC). Similarly, five nodes viz. Chennai, Coimbatore, Hosur, Salem and Tiruchirappalli have been identified for developing Tamil Nadu Defence Industrial Corridor (TNDIC). Government intends to develop defence manufacturing ecosystem having conducive conditions including supply chain for giving push to production and testing & certification to create economies of scale and facilitate development of internationally competitive enterprises in the country.

 

As per the information received from Government of Uttar Pradesh for UPDIC, 105 Memoranda of Understanding (MoUs) have been signed with industries/organisations worth potential investments of Rs 12,139 crore. Already, Rs 2,422 crore have been invested in UPDIC. Total 1,608 hectare of land has been acquired for development of UPDIC. Further, as per the information received from Government of Tamil Nadu for TNDIC, arrangements have been made through MoUs etc. for potential investment of Rs 11,794 crore by 53 industries. Already, Rs 3,847 crore have been invested in TNDIC. Total 910 hectare of land has been acquired for development of TNDIC.

 

The seven new DPSUs carved out of erstwhile Ordnance Factory Board have been incorporated as Government companies (wholly owned by the Government of India) under the Companies Act 2013 in October 2021. Government has taken steps to initially handhold and support these new defence companies in starting their business as corporate entities. In this regard, outstanding indents with erstwhile OFB were grandfathered and converted into deemed contracts valuing about Rs 70,776 crore for the next five years. These deemed contracts provide annual targets for delivery of products. Every year, 60% of amount pertaining to that year’s target would be paid by the Services to the new DPSUs as advance as per the terms and conditions stipulated in the deemed contract. The advances provide the working capital to the newly constituted DPSUs. With more functional and financial autonomy, these new DPSUs are focusing on widening their customer base, including exports to augment the volume of defence production. The DPSUs are pursuing export opportunity through interaction with Defence Attaches at various Indian Embassies and Missions abroad.

 

This information was given by Raksha Rajya Mantri Shri Ajay Bhatt in a written reply to Prof Rita Bahuguna Joshi and others in Lok Sabha today.

 

ABB/Savvy



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