IDPFC Introduction

India is the world’s largest military hardware importer and among top five military spenders. To meet growing modernisation needs of Indian Armed Forces, the Ministry of Defence will need to acquire equipment worth over $25,000 Crore by 2027. However, recent estimate shows that the current delivery capacity of the Defence industry sector in India is $7,500-8,000 Crore annually. This means the ratio of indigenous to imported equipment is stagnating at 30:70. To achieve the aspirational target of manufacturing 70 per cent of Defence equipment indigenously, it is needed to incentivise private enterprise for development of large scale R&D and manufacturing capabilities. It is therefore necessary to increase the production level of defence manufacturing unit and establish new units for defence manufacturing to cater to the growing need of defence sector of India. We can also reverse the flow of trade: from being the largest importer of defence items to become the largest exporter of defence goods as well.

So to provide the needed thrust to the Defence Manufacturing in India the Hon’ble Union Finance Minister MrArunJaitley announced setting up of two Defence Industrial Corridors in the country through his budget speech on February 1st 2018. Thereafter, Hon’ble Prime Minister MrNarendraModi during U.P. Investors Summit 2018 held in Lucknow on 21st February announced setting up of Defence Industrial Corridor in Bundelkhand region of Uttar Pradesh. The second Defence Corridor is being set up between Chennai and Bengaluru. As per the announcement of Defence Production Corridor in U.P. (Bundelkhand) and Tamil Nadu (Chennai) and to support the Make in India campaign for defence manufacturing, it was proclaimed by the Government to provide the MSMEs all the needed support and assistance through different policies and incentives for active participation in Defence Production in India. Defence production is a high tech and precision manufacturing activity. Stringent quality standards are also required to be maintained. MSME’s generally are not equipped to produce such products without handholding services from Industry Associations and the Government.

Indian Industries Association (IIA) therefore decided to set up “IIA Defence Production Facilitation Centre” (IDPFC) at its Head-Office at IIA Bhavan in VibhutiKhand, Gomti Nagar, Lucknow for providing all the necessary support and assistance to MSMEs for defence manufacturing.