Strengthening India’s Defence Ecosystem: The Role Of DTIS And Defence Industrial Corridors

Introduction:

India’s defence and aerospace sectors have emerged as critical areas of focus under the Make in India initiative, as the country seeks to minimize its reliance on imports by strengthening its domestic manufacturing capabilities. In recent years, the Ministry of Defence has prioritized building a robust manufacturing base for these sectors, culminating a series of high-profile initiatives. Central to this strategy is the establishment of Defence Industrial Corridors in the states of Uttar Pradesh and Tamil Nadu, which aims at developing regional hubs for indigenous production.

Defence Testing Infrastructure Scheme:

A flagship scheme under Make in India is the Defence Testing Infrastructure Scheme[1] (DTIS), launched in May 2020. With a budget allocation of Rs 400 crore, DTIS aims to establish six to eight Greenfield Defence Testing Facilities over five years. These state-of-the-art testing facilities are designed to meet the needs of India’s growing defence industry, ensuring that domestically produced equipment meets international standards of quality and reliability. The DTIS funding model involves a 75% government grant, with the remaining 25% covered by Special Purpose Vehicles (SPVs) comprised of private Indian companies and state government agencies.

One of the key objectives of DTIS is to provide easy access to advanced testing facilities for domestic manufacturers, thereby reducing their reliance on foreign testing infrastructure. By establishing testing centres within the country, DTIS addresses a critical gap in India’s defence ecosystem and allows for faster product validation and optimization. These testing facilities are expected to play a major role in facilitating the development of high-quality defence products, reducing the need for imported testing services, and ultimately contributing to India’s self-reliance in defence manufacturing. Recently, in Uttar Pradesh, the Uttar Pradesh Expressways Industrial Development Authority (UPEIDA) is overseeing three major projects[2] under DTIS as part of the UP-Defence Corridor.

The DTIS, in particular, is designed to empower MSMEs and startups by making testing facilities more accessible to smaller industry players. The scheme’s focus on MSMEs is aligned with India’s broader objective of enhancing innovation at the grassroots level, encouraging smaller companies to contribute to the country’s defence capabilities. By providing financial support and access to testing infrastructure, DTIS enables MSMEs to develop high-quality defence products that meet the stringent requirements of the Ministry of Defence.

Defence Industrial Corridors

The Defence Industrial Corridors[3] (DICs) is a strategic component of India’s Make in India initiative, focused on reducing dependence on imports and enhancing the domestic defence production ecosystem. The corridors, located in Uttar Pradesh and Tamil Nadu, are designed to attract both Indian and foreign investments in defence manufacturing. They serve as hubs where private companies, government agencies, and research institutions can collaborate on developing advanced defence and aerospace technologies.

As India is projected to spend between USD 200-250 billion on defence procurement over the next decade, the DICs play a crucial role in achieving self-reliance by focusing on indigenization. The Ministry of Defence has set an ambitious goal of doubling annual defence production to USD 26 billion by 2025[4], up from USD 12.5 billion in 2019-20. To reach this target, the corridors aim to boost defence exports, stimulate local economic growth, and generate employment by creating an environment conducive to the development of MSMEs and startups.

Objectives of Defence Industrial Corridors

The Defence Industrial Corridors serve a variety of objectives that are aligned with India’s broader goals for self-reliance and economic growth. Key objectives include:

1. Economic Growth: The DICs are intended to drive regional economic growth by transforming the requirements of the armed forces into local production capabilities. This strategic focus not only meets national defence needs but also enhances the economic development of the states involved, particularly Uttar Pradesh and Tamil Nadu.
2. Indigenization Requirements: By focusing on indigenization, the DICs contribute to reducing the country’s reliance on imported defence products. The MoD has set specific targets for indigenization, aiming to meet over USD 26 billion worth of equipment requirements by 2025. The DICs play a vital role in fulfilling these targets by supporting the production of indigenous equipment and systems.
3. MSME Development: The corridors encourage the growth of MSMEs by promoting ancillary industries that support defence manufacturing. The MSME sector is vital to India’s industrial landscape, and its participation in defence manufacturing helps to diversify the supply chain and promote innovation. By integrating MSMEs into the defence ecosystem, the DICs provide a platform for smaller companies to contribute to the sector’s growth.
4. Employment and Skill Development: As a catalyst for job creation, the DICs are expected to generate a substantial number of employment opportunities within their respective regions. In addition, they contribute to skill development by promoting training programs aligned with the needs of the defence and aerospace sectors. The DICs are strategically located to maximize India’s manufacturing potential in defence technology, while also contributing to regional economic growth and development. By positioning these corridors in Uttar Pradesh and Tamil Nadu, the government aims to leverage existing infrastructure, skilled labour, and investment incentives to encourage industry stakeholders to set up manufacturing units. The development of these corridors aligns with India’s goal to indigenize 70% of its defence production, a target that not only boosts self-reliance but also stimulates local economies through job creation and skill development.

Innovations for Defence Excellence:

Beyond the corridors, the Indian government has implemented various supportive schemes to drive innovation and technology development within the defence sector. The Innovations for Defence Excellence (iDEX) initiative is one such program designed to create partnerships between the government and private sector entities, including startups and Micro, Small, and Medium Enterprises (MSMEs). Through iDEX, the Ministry of Defence provides funding and mentorship to small-scale innovators, enabling them to develop solutions that address specific defence challenges.

Defence Investors Cell:

Another key initiative is the Defence Investors Cell, which acts as a single point of contact for industry stakeholders interested in investing in the Indian defence and aerospace sectors. The Defence Investors Cell provides comprehensive information on investment opportunities, regulatory processes, and government incentives. By addressing queries and facilitating access to vital resources, the cell supports investors and enables them to navigate the complexities of the defence sector. This proactive engagement not only attracts investment but also promotes greater industry participation in defence manufacturing.

Conclusion:

The approach of the Make in India initiative is evident in the diverse range of schemes and programs that support defence manufacturing. By establishing dedicated industrial corridors, promoting partnerships with private industry, and providing access to advanced testing facilities, the government is laying the groundwork for a self-sufficient defence sector that can meet the country’s security needs. The development of indigenous defence manufacturing capabilities is not only a matter of national security but also a driver of economic growth, as the defence sector creates jobs, promotes innovation, and builds a skilled workforce. In this context, initiatives like DTIS and the Defence Investors Cell are essential to achieving the vision of a self-reliant India.

https://pib.gov.in/PressReleasePage.aspx?PRID=1746365

[2] https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2039035#:~:text=The%20DTIS%20was%20launched%20by,imports%20and%20enhancing%20self%2Dreliance.

[3] https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1913309

[4] https://pib.gov.in/newsite/PrintRelease.aspx?relid=193256

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