SMEs can meet needs of defence, railways

Small and medium enterprises (SMEs) have the potential to fulfill the broad sourcing requirements of defence and the railways in the country.

"The Indian Army needs the best and we do not compromise on quality. If SMEs are capable of understanding and fulfilling our requirements, they are most welcome," said Rajesh Arya, Master General of Ordnance Branch, Indian Army. Arya was speaking at a seminar on SME Linkage 2004 being organised by CII and the Government of Gujarat in Ahmedabad on Friday.

The Indian Army purchases more than Rs 15,000 crore worth of equipment and accessories on an annual basis. Over 60 per cent of the broad sourcing requirements of the army is fulfilled by the ordinance factory, 15 per cent comes from public sector undertakings (PSUs), 15 per cent from imports and 10 per cent from the industry. Of the 10 per cent of the broad sourcing requirements procured from the industry, over 60 per cent comes from small and medium enterprises, while the remaining 40 per cent is procured from large enterprises.

The army's broad sourcing requirements include shells, explosives, fuses for ammunitions, spares for guns and grenades, cartridge cases, repowering of imported engines, fuel injection equipment for vehicles, cooling fuel and lubrication systems for vehicles, electronic communication spares, sub assemblies for tanks, nuclear, biological and chemical protection systems and mechanical transport equipment amongst others.

The revenue expenditure of the Indian Air Force for import of spares and accessories is between Rs 1500 to Rs 2000 crore. As part of its indigenisation efforts, it has allocated around Rs 100 crore to Rs 150 crore for broad sourcing requirements from SMEs.

"With the break up of Soviet Union, the Indian Air Force has had to go for indigenisation and the SMEs can play a very active part in it," said Ranvir Singh, Command Indigenisation Officer, Indian Air Force.

The Air Force has the broad sourcing requirements of electronic items, printed circuit boards, rubberised components, mechanical items and other miscellaneous items related to the air craft.

The value of material including fuel purchased by the Indian Railways in the year 2001-2002 was Rs 10,950 crore.