Tamil Nadu, Karnataka gear up after Centre clears defence corridor

In an apparent attempt to placate warring neighbours Tamil Nadu and Karnataka, who have for long been fighting over water, the Centre has proposed to build a defence corridor linking the two states. While the Union government is done with its part, the state governments are now gearing up to be facilitators, and industry is upbeat to pitch in with its capabilities. 

Finance Minister Arun Jaitley, in his Budget speech, said the Centre would take measures to develop two defence industrial production corridors in the country.

Jaitley also announced that an industry-friendly Defence Production Policy would be framed in 2018 to promote domestic production by public, private and micro, small and medium enterprises (MSME). 

Lauding the offer, Defence Minister Nirmala Sitharaman said the corridors would give a “big boost” to defence production and pave the way for setting up the first Defence Production Corridor in Tamil Nadu.

The Centre has underscored that the prevailing ecosystem, though scattered, is conducive for defence production. The presence of investors makes it all the more obvious for the government to choose this part of the country for the first corridor. Industry representatives have seconded the view.  

In its attempt to achieve self-reliance in defence production under the overarching ‘Make in India’ initiative, the Narendra Modi government is trying to forge new partnerships with private industry. The corridor is expected to attract around Rs 1,250 billion investment and create 4,00,000 jobs. It will start from Mysore, pass through Bengaluru in Karnataka, to connect with Chennai, Coimbatore, Salem and Tiruchy in Tamil Nadu, said sources.

All these places have set up PSU defence units, including Bharat Heavy Electricals Ltd, Heavy Vehicles Factory, Bharat Electronics Ltd, Hindustan Aeronautics Ltd, various private players and thousands of MSMEs, which helped in setting up facilities and capabilities for the past five decades.

Ajay Kumar, secretary, defence production, said Tamil Nadu was the Detroit of Asia, and the next logical extension was to become strong in defence manufacturing. 

Tamil Nadu has several defence production plants, including a tank manufacturing unit in Avadi and ordnance factories in Avadi and Tiruchi. Coupled with Larsen & Toubro’s Katupalli Shipyard at Ennore, which manufactures ships for the Navy and the Coast Guard, the state has a robust defence production ecosystem. 

This can be leveraged further in sync with PSUs in Bengaluru to create a major manufacturing corridor, added H S Shankar, chairman and managing director at Alpha Design Technologies. He added that Karnataka had the required technological support, including software, electronics and IPs, to achieve the target. 

There are investors to back the project, he said and added that such an ecosystem was not available in other parts of the country and in the next five years the corridor would be the story of success.

Tamil Nadu has a great potential in the industry sector. 

So, it is important that there are no hurdles for industries, and measures should be taken to remove these, if any, said Sitharaman. “We should plan for the next 50 years in capacity building.” 

Tamil Nadu Chief Minister K Palaniswami said the state government was in the process of framing an aerospace and defence policy to get a 30 per cent share in the sector and create ‘high-end’ employment opportunities for around 100,000 people.