The Minister Speaks

The government will undertake reforms to improve the productivity and efficiency of ordnance factories

Aditya Kakkar

Defence minister Nirmala Sitharaman on December 14 said that the defence ministry is undertaking a major review of the role of ordnance factories. Speaking at Federation of Indian Chambers of Commerce and Industry’s (FICCI’s) 90th Annual General Meeting, Sitharaman said, “This may be a proper and suitable occasion to say that I am doing a major review of the ordnance factories, to make sure we understand where they are, what is it that they have to be given, are they going to be in a position to be joint venture partners for people trying to benefit from transfer of technology (ToT), so Ordnance Factory Board (OFB) are also being looked into.”

Defence minister Nirmala Sitharaman
Defence minister Nirmala Sitharaman at FICCI’s 90th AGM

The government is examining the ordnance factories to explore ways to boost their productivity. There are 41 factories under the OFB and there have been several demands to undertake reforms to improve their productivity and efficiency. Tracing its origin to British India in 1787, the ordnance factories (OFs) are the oldest and largest organisation in India’s defence industry where 41 factories are divided into five verticals, ammunition and explosives; weapons, vehicles and equipment; materials and components; armoured vehicles; and ordnance equipment. The 41 OFs are under the administrative control of the OFB which is under the ministry of defence (MoD’s) department of defence production. In February, the Prime Minister’s Office (PMO) had asked OFBs to furnish a report on their achievement from 2013 onwards. In 2013, OFBs could meet the targets on only 39 per cent of the items required by the Indian defence forces.

In an effort to be given greater role for the private sector, the Defence Research and Development Organisation (DRDO) has also been asked to ‘identify patentable products that can be commercialised.’ She said that the Centre is looking at organically grown industrial parks with inclination towards defence partnerships. To begin with, Chennai-Bengaluru and Mumbai-Pune-Aurangabad are being looked at as they have a large pool of start-ups that can help in defence manufacturing. “We are planning to tell them about the requirement of the armed forces for the next 40-50 years so that they can lay a roadmap for their capacity building.”

The defence minister also called for more meaningful engagement with FICCI on start-ups so that this sector gets activated. Under the Technology Acquisition and Development Fund which has been created, eight projects have almost fructified and were about to be sanctioned while close to another 24 projects were in the process of coming through the Technology Acquisition and Development Fund. Lauding the valuable work done by her predecessors, Sitharaman said her ministry was speeding up many of the decisions taken by them and there was now a lot of activity in the defence sector. Procurement meetings were being held twice a month along with simplification of processes and the government was on a mission mode on ensuring greater transparency in defence with devolution of powers to respective quarters for expeditious delivery. “Designing, development and manufacturing by India would have to have speedier traction,” she said.

Asked about handing over of the strategically located Hambantota port to China on a 99-year lease by the Sri Lankan government, she said that India has been watchful of all the developments in the neighbourhood. She commented that the strategic partnership model was brought to support the domestic defence industry and to ensure that India, which is now a leading importer of military hardware, becomes a defence exporter.

“Even though the defence sector is now open, we are very clear that the benefits have to reach the SMEs of India,” said Sitharaman. With India emerging as a major consumer of arms, efforts were on to see how much of this requirement could be produced in India and how much could be sold outside India.

Welcoming the defence minister, FICCI’s outgoing President, Pankaj R. Patel, said that the defence minister has been a source of great enthusiasm in her encouragement to the industry while the new President, Rashesh Shah, said that industry would be happy to partner the government in its efforts to bring in change in defence procurement.


Call us