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MSME & START-UP BULLETIN, VOLUME 1, ISSUE 1, AUGUST 2022

ATTAINING SELF-RELIANCE

IN

DEFENCE MANUFACTURING:

ROLE OF MSMEs

Dr. P.Malarvizhi
Dr. Manpreet Kaur
Associate Professor, Professor,
SOIL School of Business Design, Gurugram. SOIL School of Business Design, Gurugram

I. Introduction
Indian defence forces is one of the largest forces The introduction of Micro, Small and Medium
across the globe. The major challenge for the Indian Enterprises (MSME) Development Act, 2006
defence industry is to equip such a large force with marked the beginning of the era for promotion of
modern technology and equipment. Though India relies domestic manufacturing and service industries.
largely on imports of defence equipment, but the recent After enactment of this act, Indian government
reforms and initiatives of the government facilitated has supported MSME with various schemes to
development of defence capabilities indigenously. As facilitate their access to funds, modern technology
a result, the contribution of private sector in defence and expansion through contracts. MSME contribute
manufacturing has grown considerably. MSME by signifi cantly to the GDP of India and promote nation’s
virtue of their presence in Tier-II and III within the growth by providing employment opportunities to
supply chain, can become important force multiplier lakhs of unskilled and semi-skilled individuals. In
to defence manufacturing. This article discusses the quantitative terms, MSME contribute almost 30%
role of MSME in defence, the initiative taken by to India’s GDP and 50% to total exports. Further,
government to promote MSME in defence, the current about one-third of the manufacturing output of
challenges faced by MSME, pre-requisites to become India is contributed by MSME making them key
defence MSME followed by the way forward. drivers of long-term sustainable growth of the

The Institute of Cost Accountants of India 19