In the ongoing electioneering in India’s politically most sensitive and important state of Uttar Pradesh, Prime Minister Narendra Modi, Defence Minister Rajnath Singh and Union Home Minister Amit Shah have made it a point to emphasise how the proposed defence corridor in the state will see projects worth lakhs of crores, producing drones, fighter aircraft components and missiles, among others. Other than promoting or catering to the country’s defence needs, these will improve the state’s infrastructure and generate lakhs of jobs.
If promises of these tall leaders of the country are implemented fully, Uttar Pradesh, no doubt, will become one of the country’s most developed states. Challenge lies in implementation, though some projects are nearing completion.
The Modi Government has established two Defence Industrial Corridors (DICs) in the country, one in Uttar Pradesh namely Uttar Pradesh Defence Industrial Corridor (UPDIC) and the other in Tamil Nadu namely Tamil Nadu Defence Industrial Corridor (TNDIC) to attract investment of about Rs 10,000 crore in each corridor.
Six nodes, namely Aligarh, Agra, Chitrakoot, Jhansi, Kanpur and Lucknow have been identified for the UP Defence Industrial Corridor. Five nodes, namely Chennai, Coimbatore, Hosur, Salem and Tiruchirappalli have been identified for TN Defence Industrial Corridor.
As per information received from state governments, in UP Defence Industrial Corridor, Uttar Pradesh Expressways Industrial Development Authority (UPEIDA), the nodal agency, has signed 62 Memorandum of Understandings (MoUs) with private/public industries, worth potential investments of approx. Rs 8,638 crore.
The UP Government has promised the following facilities
1. Assured water supply and uninterrupted electricity (132 KVA) along with pelican wire fencing boundary wall at the site
2. Connectivity with four-lane heavy-duty highway connected with Bundelkhand Expressway and DelhiJhansi
3. Single-window approvals and clearances to Defence and Aerospace (D& A) manufacturing units
4. Labour Permits for D& industry towards flexible employment conditions
5. Simple procedures and rationalised regulatory regime with easy reimbursement of incentives and subsidies
In TN Defence Industrial Corridors, Tamil Nadu Industrial Development Corporation (TIDCO), the nodal agency, has made arrangements through MoUs etc. for potential investment of Rs 11,153 crore by 40 Industries.
Tamil Nadu holds the following strategic advantages which makes it a suitable destination for a defence corridor:
A large coastal line which has four large seaports (three government and one private) and 22 minor ports
Four international airports at Chennai, Coimbatore, Trichy, Madurai; and two domestic airports at Tuticorin and Salem
Power surplus with a renewable energy capacity of 11,113 MW
Chennai is connected to the world by three submarine cables providing a bandwidth of 14.8 Tbps
A destination of choice for Korean investors; the state is the largest recipient of Korean Foreign Direct Investment (FDI) to India
Setting up of Defence Industrial Corridors aims to catalyse indigenous production of defence and aerospace-related items, thereby reducing our reliance on imports and promoting export of these items to other countries which may create ample employment opportunities and growth of private domestic manufacturers; Micro, Small and Medium Enterprises (MSMEs); and startups.
The UP Government promulgated ‘Uttar Pradesh Defence & Aerospace Unit and Employment Promotion Policy’ in 2018 and the TN Government promulgated ‘Tamil Nadu Aerospace and Defence Industrial Policy’ in the year 2019, offering incentives to the companies in form of stamp duty incentives, land cost incentives and electricity tax exemption etc.
Micro, Small & Medium Enterprises are an integral part of the successful implementation of both the corridors attracting investments in the aerospace and defence sectors. Presently out of a total of 81 MOUs signed by both the state governments, 30 are with MSMEs. In both corridors, investments have been attracted from anchor industries, MSMEs, including foreign OEMs and startups. Even under Offset policy, a higher multiplier of 2.0x level has been assigned for investment in defence corridors.
All these are the laudable steps that will contribute a lot to the advance-march of a Rising India.
