DEVELOPMENT OF DEFENCE CORRIDORS

Published on 18 Feb 2025

Defence Industrial Corridors (DICs) are dedicated regions or areas strategically planned to promote indigenous production of defence and aerospace-related items.

Given the increasing focus on self-reliance, the Ministry of Defence (MoD), has set a target of doubling the Defence production to USD 25 billion by 2025 from USD 12.5 billion in 2019-20. In order to achieve the targeted annual growth rate of around 15 percent, the MoD is focusing on boosting Defence exports through these corridors.

Objectives of Defence Industrial Corridors

• Economic Growth:  DICs transform UP & TN economies. Domestic defence production creates jobs in manufacturing, infrastructure, and services.

• Indigenisation Goals: DICs meet MoD's indigenisation needs, reducing reliance on foreign imports and boosting domestic production using existing DPSUs, OFBs & new private players. 

• "Make in India" Champion: DICs directly support the initiative by promoting domestic defence manufacturing, reducing import dependence and potentially making India a defence equipment exporter.

• MSME Power: DICs nurture a thriving ecosystem for MSMEs in aerospace and defence. They encourage "ancillary industries" to support larger manufacturers, creating a strong and self-sufficient manufacturing network.

• Jobs & Skills: DIC growth creates jobs. Skilling programs ensure a workforce that meets global standards, benefiting both the DICs and the states' overall employability.

India has established two Defence Industrial Corridors:

• Uttar Pradesh Defence Industrial Corridor (UPDIC)

• Tamil Nadu Defence Industrial Corridor (TNDIC)

Uttar Pradesh Defence Industrial Corridor (UPDIC)

The UP Defence Industrial Corridor, spearheaded by the Uttar Pradesh Expressways Industrial Development Authority (UPEIDA), is a game-changer for indigenous defence manufacturing. It spans over six key locations - Agra, Aligarh, Chitrakoot, Jhansi, Kanpur, and Lucknow 

The UP Defence Corridor boasts a "Plug and Play" infrastructure, and consist of the following features:

• Essential Utilities: Reliable water supply and uninterrupted electricity (132 KVA) ensure smooth operations.

• Seamless Connectivity: A 4-lane heavy-duty highway connects the corridor to the Bundelkhand Expressway and the Delhi-Jhansi route, facilitating easy transportation.

• Fast-Track Approvals: Nivesh Mitra, the state's single window system, streamlines approvals and clearances for Defence and Aerospace (D&A) units, saving valuable time.

• Flexible Workforce: Tailored labour permits cater to the specific needs of the D&A industry, allowing for flexible employment options.

• Simplified Processes: Straightforward procedures and a streamlined regulatory environment make it easier to claim incentives and subsidies, reducing administrative burdens.

Tamil Nadu Defence Industrial Corridor (TNDIC)

The Tamil Nadu Defence Corridor, spearheaded by the state government, boasts five key locations: Chennai, Coimbatore, Hosur, Salem, and Tiruchirappalli. These strategically chosen nodes benefit from Tamil Nadu's inherent advantages, which include:

• Strong Connectivity: Four international airports (Chennai, Coimbatore, Trichy, Madurai) and two domestic airports (Tuticorin, Salem) ensure smooth air cargo movement and easy travel for personnel.

• Reliable Power Supply: Tamil Nadu's surplus power capacity, including a significant 11,113 MW of renewable energy, guarantees uninterrupted operations for industries.

• Chennai's Submarine Cables: Three submarine cables with a bandwidth of 14.8 Tbps connect Chennai to the world, facilitating seamless communication and data transfer.

• South Korean Investments: As the largest recipient of Korean FDI in India, Tamil Nadu enjoys strong ties with South Korean investors, offering potential partnerships and collaborations in the defence sector.

Challenges faced by Defence Industrial Corridors

• Regional Imbalance: Focus on just UP and TN might lead to demands for DICs in other states, creating political friction.

• Private Sector Engagement: Attracting private investment remains a challenge. The government needs to incentivize participation.

• Tax Benefits for Industries: Private players seek tax benefits similar to those offered in Special Economic Zones (SEZs) to make DICs more attractive.

• MSME Integration:  Incorporating Indian MSMEs, still in their early stages, into global supply chains requires addressing stiff competition, advanced technology needs, and skilled worker shortages (e.g., mechatronics engineers).

• Quality & Standards: Meeting stringent global standards for international competitiveness necessitates a skilled workforce to ensure product quality.

• Logistical Hurdles: Efficient functioning requires addressing transportation, supply chain management, and infrastructure development. The National Logistics Policy (2022) can help streamline these areas.

• Industry-Academia Collaboration: Stronger ties between defence industries and academic institutions are crucial for research, innovation, and workforce development.

Measures to be taken in Future

• Evolving Policy Framework:  Continuously update policies to create a growth-friendly environment for defence innovation, as alignment with the National Infrastructure Pipeline.

• Engaging Private Sector:  Actively involve private players by offering incentives and recognizing their contributions. Their expertise, investment, and innovation are crucial.

• Stronger Partnerships: Foster robust collaboration between the government and private entities. This allows for shared problem-solving, resource sharing, and innovation.

• R&D Focus:  Prioritize research and development to develop cutting-edge technologies, enhancing India's global defence market competitiveness.

• Industry 4.0 Adoption:  Embrace Industry 4.0 standards by integrating advanced technologies like AI, IoT, big data analytics, and automation into manufacturing and operations. 3D printing for rapid prototyping is one example.

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Keywords:
DEVELOPMENT OF DEFENCE CORRIDORS Objectives of Defence Industrial Corridors Uttar Pradesh Defence Industrial Corridor Tamil Nadu Defence Industrial Corridor Challenges faced by Defence Industrial Corridors

Syllabus:
General Studies Paper 1

Topics:
Resources Distribution