UP Defence Manufacturing Policy coming soon, says Industry Minister

To boost Rs 200 billion Bundelkhand Defence Corridor

The Yogi Adityanath government is giving the final touches to the Uttar Pradesh Defence Manufacturing Policy 2018 to boost the proposed Rs 200 billion Bundelkhand Defence Corridor.

"We are working on the state defence manufacturing policy and it would soon be announced," UP industry minister Satish Mahana told Business Standard here.

The proposed defence corridor for manufacturing defence products was announced by Prime Minister Narendra Modi after inaugurating the UP Investors Summit 2018 on February 21 in Lucknow. Another such Corridor is coming up in Tamil Nadu, which has already taken lead in moving ahead with the project and collaborating with the private manufacturers.

Meanwhile, the Adityanath government is planning to host a mega buyers-sellers meet in Kanpur next month comprising private manufacturers, public sector units (PSU) and the defence forces. The Corridor would comprise 6 districts viz. Aligarh, Agra, Jhansi, Kanpur, Lucknow and Chitrakoot.

The Kanpur based industries are excited about the business prospects with the proposed setting up of the defence corridor in UP. "The Corridor would open a big opportunity for us to supply to the defence forces. The Kanpur expo would allow us a peek into their actual requirements,” Kanpur based hosiery company Jet Knitwears Managing Director Balram Narula said.

Last week, Mahana had held a meeting with industry and PSUs to take their feedback ahead of the Kanpur expo, where about 250 products routinely procured by the defence wings would be displayed.

Following the de-licensing of 275 defence related wares, a huge opportunity has been thrown open for domestic private manufacturers for supplying to the defence forces in competition with the PSUs, which earlier enjoyed unbridled monopoly over such supplies to the tune of billions of rupees.

These items are referred to as ‘non-core items’ of Ordnance Factory Board (OFB). The procurement of these items does not require no-objection certificate (NoC) by OFB even if the items were in the production range of OFB. For such products, now the army can float tenders, in which OFB can also participate.

The state has already identified 3000 hectares for the Corridor and collaborated with Indian Institute of Technology, Kanpur (IIT-K) and Banaras Hindu University (BHU) as knowledge partners.

The Centre had earlier announced to invest nearly Rs 30 billion in the proposed Corridor, which in turn is expected to generate total investment of Rs 200 billion. The central government investment would be made for creating necessary infrastructure such as ammunition blast testing centre to facilitate ‘plug and play’ model by the private sector companies in setting up their facilities.

The state would provide a slew of incentives and subsidies to the private sector with regards to land, R&D, testing unit, capital expenditure, infrastructure etc. The Centre is encouraging the foreign defence manufacturers to forge alliances with Indian companies.