On Vijayadashami, PM Modi launches 7 defence PSUs carved out of OFB

New defence companies will not only achieve expertise but also become a global brand, says PM Modi

Don't want to miss the best from Business Standard?

There is more transparency, trust and technology-driven approach in India's defence sector now than ever before and major reforms are taking place for the first time since Independence while discarding stagnant policies, Prime Minister Narendra Modi said on Friday.

In an address at an event to dedicate seven new defence companies to the nation, Modi, referring to the self-reliant India campaign, said the goal is to make the country the world's biggest military power on its own.

In a major reform initiative, the seven state-run defence companies were created after dissolving the over 200-year-old Ordnance Factory Board (OFB). The assets of the OFB including its 41 ordnance factories were transferred to the seven new firms.

Modi mentioned that the target should be that the companies not only establish expertise in their products but also become global brands. He urged that while competitive cost is India's strength, quality and reliability should be its identity.

He said the world saw the strength of India's ordnance factories at the time of World War I and that they used to have better resources and world-class skills, but the companies were ignored in the post-Independence period, leading to the country's dependence on foreign supplies.

"After Independence, we needed to upgrade these factories, adopt new-age technology. But it was not given much attention. Over time, India became dependent on foreign countries for its strategic needs. These new seven defence companies will play a big role in bringing change in this situation," he said in his video address.

Modi said that as India entered 75 years of Independence, projects are being completed that were stuck for a long time.

"Today, there is more transparency, trust, and technology-driven approach in the defence sector of the country than ever before. For the first time after Independence, so many major reforms are happening in our defence sector and instead of stagnant policies, a single-window system has been arranged," he said.
 

"These seven defence companies will play a major role in changing this situation," he said.

The prime minister hoped that the new companies would play an important role in import substitution. An order book of more than Rs 65,000 crore reflects the increasing confidence of the country in these companies, he added.

Noting that the decision on reform of the OFB was pending for the last 15-20 years, Modi said works stuck for decades are being completed and India is taking new resolutions to build a new future.

"In the 21st century, whether a country or a company, its growth and brand value is determined by its research and innovation. From software to the space sector, India's growth, India's new identity is the biggest example of this," he said.

"Therefore, I also make a special request to all the seven companies that research and innovation should be a part of your work culture....You not only have to match the world's biggest companies, but also take the lead in future technology," he added.

Modi said the government has given full functional autonomy along with giving a better production environment to all the companies, adding it has also been ensured that the interests of the workers of these factories are fully protected.

The prime minister also underlines the need for giving maximum opportunity to research-oriented youth and give them full freedom to think.

"I will also tell the start-ups of the country, through these seven companies, the new beginning that the country has started today, you should also be a part of it," he said.

"You should think about your research, how your products can benefit from each other's capabilities in conjunction with these companies," he added.

Defence Minister Rajnath Singh and representatives from the defence industry associations were present on the occasion.

Singh has already clarified that there will be no change in service conditions of nearly 70,000 employees of the erstwhile organisation and the decision to corporatise the OFB is driven by efforts to boost India's defence manufacturing sector.

The new defence companies are Munitions India Limited (MIL), Armoured Vehicles Nigam Limited (AVANI), Advanced Weapons and Equipment India Limited (AWE India), Troop Comforts Limited (TCL), Yantra India Limited (YIL), India Optel Limited (IOL) and Gliders India Limited (GIL).