Time to lift MSMEs from ‘garage-type’ operations in defence

Discussion in 'Defence & Strategic Issues' started by AVERAGE INDIAN, Nov 24, 2014.


    AVERAGE INDIAN Exorcist Senior Member

    Sep 22, 2012
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    New Delhi, November 23:

    Medium, small and micro enterprises (MSMEs) in the defence and aerospace sector can be ‘game changers’ by contributing their bit to the Prime Minister’s ‘Make in India’ call, but fear they may end up in ‘garage-type operations’ if the required support is not extended.

    With modern technology in their hands and an instant connect with global trends, what MSMEs need most is credit support and hand-holding by bigger players in the sector, says G Raj Narayan, the founder Managing Director of Bangalore-based Radel Group, which is into diverse worlds such as designing and making electronic musical instruments, such as digital veena, tabla, to pods used in rocket launchers and avionics used by Indian Air Force and HAL.

    “There are immense capabilities in MSMEs in aerospace and defence, but they are restricted to being vendors for low value-added services,” Narayan told BusinessLine. He was in Delhi to participate in the Aerospace and Defence Summit.

    A post-graduate in electronics from IIT Madras and a former HAL engineer, Narayan said one way to tap into the huge talent pool could be to have special classification of “defence MSMEs’, with special funding and support mechanisms, such as exclusive clusters tied to bigger players in the sector, such as PSUs and the Tatas.

    What has raised hopes among MSMEs in the sector is the ₹100-crore technology fund announced by Prime Minister Narendra Modi.

    “The feeling I get is that a part of this fund will be apportioned to critical projects that involve technology, indigenisation. I also heard about a 75 per cent grant for design development… if that happens, it will be great news,” he said.

    Radel Advanced Technology Pvt Ltd is into in-house design and manufacture of products such as Matra pod used in the rocket launcher in Jaguar fighter aircraft, light panels, speed switch assemblies, indigenous voice monitoring systems among others.

    “If India is serious about being self-reliant in defence production, it needs to nurture and offer an enabling ecosystem to MSMEs,” he says, adding that unless this is done, India may have to face “crippling effects’ of over-reliance on imports, which often leads to buying outdated foreign technology.

    “I don’t believe in foreigners giving technology. Why should they? In the so-called technology transfers that happen, they only give drawings, no design. And most often, the technology that is given is outdated, at least two generations down, and they make a couple of billion dollars,” he says.

    Narayan feels India needs to develop technology on its own. It has the expertise and knowledge, all it needs is mapping of MSMEs in the defence sector and offer credit support.

    “In my eight years, I have not got a single loan from State Bank of India. My track record for 35 years does not have a single negative balance sheet. I don’t know on what basis my loan application is rejected,” he adds.

    Time to lift MSMEs from ‘garage-type’ operations in defence | Business Line
  3. DingDong

    DingDong Senior Member Senior Member

    Oct 24, 2014
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    MSMEs have supported the defence forces when/where the biggies won't. It is Government's turn to pay them back and give them their fare share.
    sgarg likes this.

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