Union Budget 2022: Defence goes big on self-reliance, TN set to fire on all cylinders

CHENNAI: The Centre’s decision to reduce imports and promote self-reliance (atma nirbharta) in procuring equipment for armed forces may add ammo to Tamil Nadu’s bourgeoning defence industry. Finance Minister Nirmala Sitharaman in the Budget presented on Tuesday said 68% of capital procurement will be earmarked for domestic industry in 2022-23, up from 58% in 2021-22.

“Defence research and development (R&D) will be opened up for industry, startups and academia with 25% of defence R&D budget earmarked for it. Private industries will be encouraged to take up design and development of military platforms and equipment in collaboration with Defence Research Development Organisation (DRDO) and other organisations through Special Purpose Vehicle  (SPV) model,” Sitharaman said.

Tamil Nadu, a manufacturing hub, would be key to India’s dream of achieving self-reliance in defence procurement. Several companies in Coimbatore, Trichy and Hosur are already working with DRDO. The proposed Defence Corridor project will create an ecosystem where industries will be encouraged to take up more defence projects. 

“We are planning an R&D centre in the TN defence corridor where industries will be groomed by our scientists. A SPV will be formed soon through which industry and DRDO will become partners in all stages of supply chain starting from design, development, testing, production, marketing and exports,” said G Satheesh Reddy, secretary, Department of Defence (R&D) and chairman of DRDO. 

“This is the correct time when an Indian industry can take advantage of the latest policies of the government and join hands with DRDO to deliver defence systems and technologies to Indian defence forces and take one more step towards enhancing self-reliance through indigenous technologies, job creation and nation building,” he said.

Sources said industries like L&T and Ashok Leyland are already production partners of a Chennai-based DRDO arm that designs and develops defence technology. Under the proposed SPV, some firme may soon be groomed to have design and development capabilities as well.  

Chennai-based Heavy Vehicles Factory had bagged the supply order, worth Rs 7,523 crore, for 118 Main Battle Tanks Arjun Mk-1A for Indian Army where private industries will play a key role in supplying components.  MBT Mk-1A was developed by Combat Vehicles Research and Development Establishment in Chennai in collaboration with other DRDO labs.

Why TN is special
1. It has over 120 aerospace manufacturing companies and 700 suppliers to various defence PSUs
2. Large number of engineers graduate every year from TN, providing the right talent pool
3. It is home to the Armoured Vehicles and Ammunition Depot - AVADI. Heavy Vehicles Factory (HVF), Combat Vehicles Research and Development Establishment, Central Vehicle Depot, and 
Ordnance Depot are within the Avadi limits

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