Telangana Defence MSMEs See Rapid Growth

Hyderabad:Telangana’s defence and aerospace ecosystem has grown from around 400 MSMEs in 2016 to nearly 1,500–2,000 today, with industry leaders and government officials on Saturday calling for stronger policy support, easier access to infrastructure and greater participation by smaller manufacturers to help India become a global defence production hub.

The discussion took place at the second Defence MSME Manufacturers Forum organised by the Indian Chamber of Commerce (ICC) under the theme Make in India for the World: Empower MSMEs for India’s Defence & Aerospace Future.

Praveen P.A., director of the state’s aerospace and defence unit, said the state had focused on building an ecosystem instead of waiting for domestic defence orders. “We had counted around 400 MSMEs when we started. Today, we have 1,500 to 2,000 MSMEs actively participating,” he said.

He noted that Telangana attracted investments from global companies such as Lockheed Martin, Boeing, GE Aerospace, Airbus, Pratt & Whitney and Safran. Safran alone has invested around ₹2,500 crore in Hyderabad over the past six years and created nearly 2,000 jobs, he said.

Commodore P.R. Hari (Retd.), chairman and managing director of Garden Reach Shipbuilders & Engineers Ltd, said India’s defence production had risen from ₹46,429 crore in 2014–15 to ₹1.78 lakh crore in 2025–26, while exports increased from ₹1,941 crore to ₹38,424 crore.

“These numbers are encouraging, but India still contributes only 0.3 to 0.4 per cent of the global defence export market,” said Commodore Hari, who is also chairman of ICC’s national expert committee on defence, aerospace and space, noting that the country remained among the world’s largest defence importers.

Calling for a change in global perception, Vishnu Malpani, executive director, Azad Engineering, said, “Why is India still seen in so many rooms as a place to find labour arbitrage, when India is home to some of the finest engineering talent in the world?” He added that aerospace and defence ultimately reflect a nation’s engineering capability and self‑reliance.

Krishna Aditya, special secretary, industries and commerce, said the Telangana government was identifying dedicated aerospace, defence and space industrial parks with common testing facilities and urged MSMEs facing issues related to land, incentives or infrastructure to approach the government. “Our intent is to facilitate support to the maximum possible industry players,” he said.

Nikhil Chakravarthy J., director, industries and commerce, said Telangana’s network of DRDO laboratories, defence PSUs and global manufacturers had helped build one of India’s strongest aerospace ecosystems, with 1,500–1,700 MSMEs now supporting the sector. He urged companies to make use of schemes such as iDEX, Aditi, T‑Works and state incentives to develop new products.

MSMEs key to defence growth: ICC report

India’s defence manufacturing has expanded rapidly over the past decade, but sustaining that growth will require stronger support for micro, small and medium enterprises (MSMEs), according to the Indian Chamber of Commerce (ICC)’s report ‘MSMEs – A Force Multiplier for India’s Defence Ecosystem, Edition 2’.

India’s defence exports at ₹38,424 crore, up nearly 30‑fold since 2014‑15; products now sold to more than 80 countries.

Despite this, India contributes only 0.3–0.4 per cent of the global defence export market.

Report recommends increasing indigenous capability and strengthening MSMEs to improve India’s global position.

Problem areas are slow procurement, inadequate testing and certification infrastructure, limited access to finance, delayed payments, challenges in scaling innovations from prototypes to commercial production.

India continues to rely on imports for several critical technologies. Sustained investment in indigenous research, subsystem development and intellectual property needed.

Report recommends expanding common testing and certification facilities and treating them as strategic national infrastructure.

Report seeks dedicated financing for defence MSMEs and start‑ups, specialised export finance, simpler procurement procedures, stronger integration into global supply chains and the creation of export‑oriented manufacturing clusters.

ICC says key areas are drones, loitering munitions, missiles, radars, electronic warfare systems, counter‑drone technologies, secure communications, cyber security and advanced materials.