PM Narendra Modi at the launch of the seven new defence companies

Aiming for self reliance in defence production, the seven new government-owned defence companies carved out of the Ordnance Factory Board (OFB) have already been given orders worth Rs 65,000 crore.

All the pending orders with OFB have been converted into deemed contracts to ensure sufficient workload with new entities dedicated to the nation at a function organised by the Ministry of Defence on the occasion of Vijayadashami in New Delhi on October 15, 2021.

The seven new Defence companies are: Munitions India Limited (MIL), Armoured Vehicles Nigam Limited (AVANI), Advanced Weapons and Equipment India Limited (AWE India), Troop Comforts Limited (TCL) (Troop Comfort Items), Yantra India Limited (YIL), India Optel Limited (IOL) and Gliders India Limited (GIL). These companies have commenced business from October 1, 2021.

These companies will be involved in production of defence equipment and material including ammunition, gun systems, armoured vehicles among other things.

Prime Minister Narendra Modi delivered a video address during the event. Defence Minister Rajnath Singh presided over the ceremony at Kothari Auditorium, DRDO Bhawan.

The Prime Minister said that the decision of creating these companies was stuck for a long time and expressed the belief these seven new companies would form a strong base for the military strength of the country in the times to come. Noting the glorious past of Indian ordnance factories, the Prime Minister commented that upgradation of these companies was ignored in the post-independence period, leading to the country’s dependence on foreign suppliers for its needs.

“These 7 defence companies will play a major role in changing this situation”, he said.

The Prime Minister mentioned that these new companies would play an important role in import substitution, in line with the vision of ‘Atmanirbhar Bharat’. “An order book of more than Rs 65,000 crore reflect the increasing confidence of the country in these companies,” he added.

Talking about new opportunities for the defence industry the Prime Minster said, “Our defence export has increased by 325 per cent in last five years.”

PM Narendra Modi mentioned that it is our target that our companies not only establish expertise in their products but also become a global brand. He urged that while competitive cost is our strength, quality and reliability should be our identity.

He further mentioned that in the 21st century, growth and brand value of any nation or any company is determined by its R&D and innovation. He appealed to the new companies that Research and innovation should be a part of their work culture, so that they just don’t catch up but take lead in future technologies. This restructuring would provide more autonomy to the new companies to nurture innovation and expertise and the new companies should encourage such talent, he added. He urged the start-ups to become a part of this new journey through these companies to leverage the research and expertise of each other.

Defence Minister Rajnath Rajnath Singh, in his address, said the move reflects the government’s resolve of achieving 'Aatmanirbhar Bharat'. He said, this decision will provide autonomy to these companies and improve accountability & efficiency in the functioning of 41 factories under them. He exuded confidence that the new structure will help in overcoming various shortcomings in the existing system of OFB and provide these companies incentive to become competitive and exploring new opportunities in the market including exports, while safeguarding the interests of the employees.

“The objective of this restructuring is to transform Ordnance Factories into productive, and profitable assets; improve expertise in product range; increase competitiveness; improve quality; enhance cost-efficiency and ensure self-reliance in defence preparedness,” he said.

The minister said that Ministry of Defence has set a target of achieving a turnover of Rs 1.75 lakh crore in aerospace and defence goods and services by 2024, including exports of Rs 35,000 crore.

He defined the present defence manufacturing scenario in the country as a synergy of the private and public sectors. “Public and private sectors are working hand-in-hand to enhance the preparedness of our Armed Forces,” he said.