The government recently approved the launch of the ‘Defence Testing Infrastructure Scheme (DTIS)’ as part of its efforts to bolster domestic defence and aerospace manufacturing. This move forms an integral part of the government’s growing focus on augmenting the country’s manufacturing base in these key sectors under its “Make in India” initiative, with the ultimate goal of reducing dependency on imports.
Understanding the Background
The Government has prioritized the development of Defence and Aerospace sectors, with a particular focus on indigenous manufacturing capabilities. One significant step towards realizing this objective has been the establishment of Defence Industrial Corridors (DICs) in Uttar Pradesh and Tamil Nadu.
However, one major challenge that continues to impede domestic defence production is the absence of easily accessible and technologically advanced testing infrastructure. Establishing Defence Testing Infrastructure is a capital-intensive process that calls for continual upgradation, making it economically unsustainable for individual defence industrial units to establish their own in-house testing facilities.
Objectives of DTIS
At its core, the scheme aims at promoting indigenous defence production, particularly encouraging the participation of Micro, Small and Medium Enterprises (MSMEs) and Start-ups. This is envisioned to be achieved by bridging the existing gaps in the country’s defence testing infrastructure.
The scheme also strives to provide easy access to cater to the testing needs of the domestic defence industry, a move that can spur indigenous defence production, reduce imports of military equipment, and bolster the country’s self-reliance.
Funding and Cooperation
At total outlay of Rs 400 crore has been earmarked under the scheme over a span of five years to establish state of the art testing infrastructure. This endeavor envisages setting up test facilities in partnership with the private industry.
To encourage participation, projects under the scheme will be eligible to receive up to 75% of government funding in the form of ‘Grant-in-Aid’, with the remaining 25% of the project cost to be borne by the Special Purpose Vehicle (SPV). Constituents of the SPV will comprise Indian private entities and State Governments.
Only private entities registered in India and State Government agencies qualify to form the implementation agency for the scheme. The SPVs under the scheme are mandated to register under the Companies Act 2013.
Location and Implementation
While the scheme primarily aims at establishing Greenfield Defence Testing Infrastructure within DICs, it is not exclusively limited to setting up Test Facilities within these corridors. The ultimate objective is to foster a conducive environment for growth and innovation in the indigenous defence sector, thereby contributing to the “Make in India” initiative.
