Lok Sabha Question No. 552 (UNSTARRED), answered on 2022-02-04
Subject: Defence Industrial Corridors
Ministry: DEFENCE
Asked by: Malook Nagar, Rajiv Pratap Rudy

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE PRODUCTION

## LOK SABHA UNSTARRED QUESTION NO. 552

TO BE ANSWERED ON 04 TH  FEBRUARY, 2022

## DEFENCE INDUSTRIAL CORRIDORS

## 552. SHRI MALOOK NAGAR: SHRI RAJIV PRATAP RUDY:

Will the Minister of DEFENCE be pleased to state:

- (a) whether the Government has set up defence industrial corridors in the country for production and manufacturing of defence equipment;
- (b)  if  so,  the  State/UT-wise  details  of  locations  where  the  said  corridors  are  being  set  up particularly in Uttar Pradesh and Tamil Nadu along with estimated funds likely to spent thereon and the reasons for selecting these locations for the purpose;
- (c) the present status along with the investment made, employment potential and other benefits of such corridors;
- (d)  the  progress  of  the  work  carried  out  in  the  projects  sanctioned/completed  and  incentives provided and supporting infrastructure proposed to be built in this regard;
- (e) whether Micro, Small & Medium Enterprises play a major role in these projects and if so, the details thereof along with the number and type of manufacturing units set up;
- (f)  whether  foreign  investments  are  also  being  attracted  for  the  projects  and  if  so,  the  details thereof along with its implications on security; and
- (g)  whether  there  is  any  proposal  to  set  up  defence  industries  corridor  in  Bihar  and  if  so,  the details thereof?

## A  N  S  W  E  R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI AJAY BHATT)

(a)  &  (b):  The  Government  has  established  two  Defence  Industrial  Corridors  (DICs)  in  the country, one in Uttar Pradesh namely Uttar Pradesh Defence Industrial Corridor (UPDIC) and other in Tamil Nadu namely Tamil Nadu Defence Industrial Corridor (TNDIC) with an aim to attract investment of about INR 10,000 Crore in each corridor. Six nodes, namely Aligarh, Agra,

Chitrakoot,  Jhansi,  Kanpur  and  Lucknow  have  been  identified  for  UP  Defence  Industrial Corridor. Five nodes, namely Chennai, Coimbatore, Hosur, Salem and Tiruchirappalli have been identified  for  TN  Defence  Industrial  Corridor.  The  nodes  have  been  selected  based  on  high potential for creation of end-to-end ecosystem for Aerospace and Defence sector development covering design, engineering and manufacturing.

(c) & (d):  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 (sixty-two) Memorandum of Understandings (MoUs) with private / public industries, worth potential investments of approx. INR 8638 Crore. Out of 62 MoUs, 25 (twentyfive) proposals with potential investments of approx. INR 2527 Crore have been finalized and land  has  been  allotted  to  the  industries.  In  TN  Defence  Industrial  Corridors,  Tamil  Nadu Industrial  Development  Corporation  (TIDCO),  the  nodal  agency,  has  made  arrangements through MoUs etc. for potential investment of INR 11153 Crore by 40 Industries.  Setting up of Defence  Industrial  Corridors  aim  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  start-ups.  UP Government promulgated 'Uttar Pradesh Defence &  Aerospace Unit and  Employment Promotion  Policy'  in  2018  and  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,  Electricity  tax  exemption  etc.  Further,  basic infrastructure support such as internal roads, drainage system, water and electricity supply etc. are also provided by the State Governments.

(e)  &  (f):  Micro,  Small  &  Medium  Enterprises  are  the  integral  part  for  the  successful implementation of both  the  corridors  attracting  investments  in  Aerospace  and  Defence  sector. Presently out of total 81 MOUs signed by both the State Governments in two Defence Industrial Corridors,  30  are  with  MSMEs.  In  both  the  corridors,  investments  have  been  attracted  from Anchor industries, MSMEs, including Foreign Original Equipment Manufacturers (FOEMs) and Start-ups.    Even  under  Offset  policy,  higher  multiplier  of  2.0x  level  has  been  assigned  for investment in Defence Corridors. As per the provisions of FDI policy in Defence sector, foreign investments in the sector is subject to security clearance by Ministry of Home Affairs. Further foreign  investments  in  the  defence  sector  are  also  subject  to  scrutiny  on  grounds  of  National Security  and  Government  reserves  the  right  to  review  any  foreign  investment  in  the  Defence sector that affects or may affect National Security.

(g): At present there is no proposal for setting up of Defence Industrial Corridors in Bihar.

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