Indian Small and Medium enterprises numbering about 6000 supply 80 per cent of components, aggregates and assemblies of complex defence weapons system and aircraft, an official statement said.

These 6000 enterprises spread all over the country supply components including hi-tech and sub-assemblies to the defence public enterprises, ordnance factories, DRDO and private industries.

A 2012 Report of the Confederation of Indian Industry (CII) and the Boston Consulting Group (BCG) put the employee base at 1.8 lakh in Ordnance Factories and defence public enterprises, which is similar to that of United Kingdom and France, the two largest producers of defence related items.

The defence ministry had set up a committee of experts headed by Dhirendra Singh to evolve a policy framework for Make in India and and it has suggested requisite amendments in Defence Procurement Procedure (DPP).

The committee has recommended that enhancing potential of SMEs in indigenization and broadening the defence  R&D in the country.

The defence Products List for the purpose of issuing Industrial Licences (ILs) under IDR Act has been revised and most of the components, parts, sub-systems, testing equipment, and production equipment have been removed from the List, so as to reduce the entry barriers for the industry, particularly small & medium segment.

To promote the participation of private sector, particularly SMEs for defence manufacturing, Outsourcing and Vendor Development Guidelines for DPSUs and OFB have been formulated and circulated to them.

The guidelines mandate that each DPSU and OFB to have a short-term and long-term outsourcing and vendor development plan to gradually increase the outsourcing from private sector including SMEs. The guidelines also include vendor development for import substitution.

Preference to ‘Buy (Indian)’, ‘Buy & Make (Indian)’ & ‘Make’ categories of acquisition over ‘Buy (Global)’ category, thereby giving preference to Indian industry in procurement.