Raw material manufacturing in defence holds the key in Assam: Official

Pankhi Sarma

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Guwahati: Assam has big potential to manufacture raw materials in the packaging industry and weaving in the clothing industry for the defence sector, a senior official of the Bharat Chamber of Commerce (BCC) told Business North East.

"Assam could emerge as a strong contender and leader in the defence industry", Rajib Chakraborty, an Ayudha Bhushan awardee, observed. He pointed out the defence ministry's initiative in promoting the role of MSMEs in the defence sector, including encouraging defence innovation by start-ups, earmarking orders up to Rs. 100 crore exclusively for domestic MSMEs, and modifying offset guidelines to integrate MSMEs into the global defence supply chain.

As part of its 'Make in India' initiative, the central government has made lists of thousands of defence systems that are to be “indigenized,” while also inviting start-ups into the sector. At the same time, it has increased its annual target for defence and aerospace production to $36 billion, while raising the export target to $6 billion. 

More than 30,000 products have been identified for production in the sector, Keka Sarma, secretary general of the BCC, told Business North East.

However, MSMEs in Assam are facing challenges arising from a lack of awareness, business confidence, documentation, and linkages between MSMEs and end customers., according to Lakshmanan S, the Secretary of the Department of Industries and Commerce & Public Enterprises. 

At the same time, he asserted that the MSME sector in Assam is poised to seize "every potential opportunity" in defence production. The formalization of MSMEs is undergoing rapid growth, with UDYAM registrations surging from 37,000 to 4 lakh in the last 2-3 years. Lakshmanan informed that there are currently an estimated 10 lakhs MSMEs in Assam, spanning both formal and informal sectors.

Bharat Chamber of Commerce organised the One-Day Awareness Session on ‘Defence Supply Chain and MSME: Building Linkages’ in partnership with the Department of Defence Production, Ministry of Defence, Government of India and Federation of Industry & Commerce of North Eastern Region (FINER) on February 28 in Guwahati. 

"The objective was to focus on the latest policy initiatives and outline the business opportunities available to the MSMEs and enable them to become more competitive in defence manufacturing and exports," Rajkumar Agrawal, Vice-President BCC told Business North East.

Ajay Dubey, Joint Director, Directorate of Planning & Coordination, Department of Defence Production, Ministry of Defence informing about the policy initiatives related to MSMEs in defence production, said that "projects with cost less than Rs. 100 crore per year based on delivery schedule have been reserved for MSMEs."

He further informed that for procurement cases up to Rs 300 crore, recognized startups and registered MSMEs may be considered for the issue of RFP without stipulation of financial parameters. The same waiver will be applicable for startups and MSMEs for Rs 300 crore to Rs 500 crore valuation band on a case-to-case basis, he added.

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Pankhi Sarma