In a big fillip to India’s private defence industry, the government has decided to earmark 25% of domestic capital procurement/acquisition budget for the local private players in FY23.
“In continuation with Government’s efforts to promote Private Industry, MSMEs and Start-ups in defence production ecosystem, the Ministry of Defence has now decided that 25% of Domestic Capital Procurement/ Acquisition Budget, amounting to Rs 21,149.47 crore, will be earmarked for domestic private Industry in the Financial Year 2022-23,” the Defence Ministry said in a release on 8 April.
Further, to foster innovation and encourage technology development in defence, it has also been decided that an amount of Rs 1,500 crore will be earmarked for procurement from Start-ups, including iDEX Start-up, from within the allocations for Domestic Capital Procurement, the ministry said.
According to the ministry, these steps will foster the growth of private industry, MSMEs and start-ups in Defence ecosystem.
Earlier, Ministry of Defence had decided to earmark 68% of Capital procurement budget for the entire domestic industry during Financial Year 2022-23.
Accordingly, an amount of Rs 84,597.89 crore was allocated specifically for Domestic defence industry in current financial year, the release said.