MSMEs Eye ₹1.39 Lakh Crore Domestic Defence Procurement Opportunity

At a State-level MSME conclave held in Tirupati on Wednesday, speakers highlighted the growing opportunities for Micro, Small and Medium Enterprises (MSMEs) in the defence production sector. The event, titled ‘India’s Defence Sector: A new era for MSMEs’, was organised by the Bharat Chamber of Commerce (Kolkata) in association with the Department of Defence Production, Ministry of Defence. Hindustan Shipyard Limited served as the nodal Defence Public Sector Undertaking, with the AP Chambers of Commerce and Industry Federation as the supporting chamber.

The conclave aimed to outline business opportunities available to MSMEs in and around Tirupati and to enable them to become part of the expanding defence manufacturing and export ecosystem. Speakers from the government and public sector undertakings detailed policy frameworks, financial allocations, and indigenisation targets.

Shubham Bansal, Director of Industries, Commerce and Export Promotion, who participated virtually, noted that the aerospace and defence sectors offer immense potential for MSMEs. He added that the department is actively exploring additional support measures through the proposed industrial housing policy to enhance the State’s competitiveness.

K.K. Yadav, Deputy Director-General (DIRW) from the Department of Defence Production, Ministry of Defence, informed the audience that the Union Budget for 2026-27 allocated over ₹7 lakh crore for defence. Of this, 75% of the capital procurement budget—amounting to nearly ₹1.39 lakh crore—is earmarked for procurement from domestic industries. “The private sector contributed 24% of India’s domestic defence production in FY 2025-26, and is expected to rise to 30% in the current fiscal,” Mr. Yadav added.

Kiran Easankarala, Director (Finance & Commercial) of Hindustan Shipyard Limited, pointed to the changing geopolitical landscape and recent global conflicts to underscore the need for India to build a strong indigenous maritime industrial base. Neeraj Kumar, Director (NDCD) from the Department of Defence Production, outlined the comprehensive policy framework aimed at promoting indigenous design, development and manufacturing. He cited the Defence Acquisition Procedure (DAP) 2020, Defence Procurement Manual (DPM) 2025, iDEX, Defence Industrial Corridors, and the Defence Investment Cell as key initiatives.

D. Srinivasa Rao, Chief General Manager (Commercial) of Hindustan Shipyard Ltd., highlighted HSL’s legacy and strategic importance as a premier defence PSU. Piyush Kumar, Director (Indigenisation) from the Department of Defence Production, spoke on ‘Indigenisation Opportunities for MSMEs’, stating, “Being Indigenous is a key pillar of ‘Aatmanirbhar Bharat,’ and it aims at reducing import dependence.”

Abdul R. Owaisi, Lead (Monitoring & Evaluation) of PM–SETU under the Department of Skill Development, Employment & Training, spoke on ‘PM–SETU and Defence’ and highlighted strategic partnerships through memorandums of understanding.

The conclave concluded with calls for MSMEs to actively engage with defence public sector undertakings and leverage government incentives to become part of the supply chain for India’s growing defence manufacturing ecosystem.