India’s latest military assertion, Operation Sindoor, conducted along the Line of Control, is more than just a tactical manoeuvre. It signals a strategic evolution in India’s national security posture—one that carries profound implications for the domestic defence industry, especially for Micro, Small, and Medium Enterprises (MSMEs). As India accelerates its resolve to safeguard territorial sovereignty, the spotlight is now shifting toward Atmanirbhar Bharat in defence. For MSMEs, this marks a clear call to action—to scale up, innovate, and integrate into the defence supply chain.
A Boost to ‘Make in India’ and ‘Atmanirbhar Bharat’ in Defence
Launched in 2014, the Make in India initiative has steadily carved space for indigenous capabilities in core sectors, but the defence domain remained complex due to historic dependence on imports. In recent years, with Atmanirbhar Bharat becoming a national doctrine, defence manufacturing has seen a notable shift.
Operation Sindoor underscores India’s readiness to act with speed and precision. Such readiness must be complemented by domestic capability—not just in arms and ammunition but in everything from advanced surveillance technologies to operational logistics. That’s where Indian MSMEs become a strategic pillar of India’s defence transformation.
The Ministry of Defence (MoD) has already earmarked over 68% of its capital procurement budget for domestic industry in FY 2023-24. A substantial portion of this is being directed toward MSMEs and startups under initiatives like iDEX (Innovations for Defence Excellence), DAP-2020 (Defence Acquisition Procedure), and Technology Development Fund (TDF).
Defence-Focused MSMEs: New Frontiers in Drones, Logistics & Surveillance
Indian MSMEs are increasingly playing a pivotal role in critical defence areas, especially:
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Drones & UAVs: With cross-border threats requiring real-time intelligence, Indian MSMEs in the drone sector are emerging as vital contributors. Companies like ideaForge, BotLab Dynamics, and several startups supported by DRDO are making strides in indigenous drone technologies for both reconnaissance and tactical operations.
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Operational Logistics: The effectiveness of missions like Operation Sindoor depends heavily on timely logistics. MSMEs offering portable infrastructure, cold-chain transport, and rapid deployment kits have an opportunity to collaborate with the Indian Army and paramilitary forces.
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Surveillance & AI Tech: Surveillance systems powered by AI and computer vision are becoming indispensable. MSMEs in Tier-2 cities like Bengaluru, Pune, and Hyderabad are already developing sensor-based systems, LIDAR-enabled surveillance, and perimeter intrusion detection platforms.
The DRDO’s Vendor Development Program and the SIDM-MoD partnership further enhance MSME participation in niche tech areas where agility and innovation are required.
Opportunities in Supply Chain, Procurement, and Exports
With increasing demand for self-sufficiency, there is an urgent need to localise defence supply chains. MSMEs must seize this moment to:
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Enter Defence Procurement Channels: Defence PSUs and private players like HAL, BEL, L&T Defence, and Tata Advanced Systems are scouting for reliable Tier-2 and Tier-3 suppliers. MSMEs that offer components, electronics, composites, and lightweight materials have immense scope.
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Export Opportunity: India’s defence exports crossed ₹16,000 crore in FY 2023–24—a sixfold rise compared to 2016–17. Countries in Africa, Southeast Asia, and Latin America are seeking cost-effective solutions in defence hardware, where Indian MSMEs have a clear edge.
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Offset and Ancillary Contracts: With India’s DPP encouraging foreign OEMs to invest in Indian value chains via offset obligations, MSMEs can offer precision parts, assemblies, and maintenance services, thus integrating into global supply networks.
Additionally, the newly launched SRIJAN Defence Portal offers a gateway for Indian vendors to showcase indigenous solutions and directly connect with procurement teams.
Policy Push and Industry Collaboration: The Way Ahead
The Government of India is actively revising procurement norms to make defence contracts more MSME-friendly. Single-vendor approvals, relaxation of financial criteria, and incubation support through iDEX and DIO (Defence Innovation Organisation) are creating an enabling environment.
Furthermore, industry bodies like SIDM (Society of Indian Defence Manufacturers), FICCI, and CII are conducting cluster-level outreach to connect MSMEs with defence procurement officials.
Key Recommendations for MSMEs:
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Register on the SRIJAN portal and GeM Defence Procurement module
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Participate in industry outreach and defence expos (like DefExpo India)
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Invest in quality certifications such as AS9100, ISO 27001, and CEMILAC/DGAQA clearances
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Build collaborations with DRDO labs and academia for innovation-led defence projects
Conclusion
Operation Sindoor is more than a show of strength—it is a strategic nudge to India’s innovation and industrial base. For MSMEs, this is a moment of reckoning. By stepping up with indigenous, reliable, and scalable solutions, they can not only serve the nation’s defence but also unlock long-term global opportunities.
As India aims to become a top five defence exporter by 2047, it’s clear that no mission—tactical or strategic—can be won without the strength of its small businesses. Operation Sindoor is a clarion call: the time for Defence MSMEs to scale up is now.