Think of Tamil Nadu and you think of it major automotive hub. The creation of an automotive corridor in Chennai, stretching to about 60 km, from Gummidipoondi to Maraimalai Nagar, passing through Tiruvallur, Sriperumbudur and Oragadam, is perhaps the sweetest leap. This corridor, dubbed the Detroit of Asia comprises not only of original equipment manufacturers (OEMs) but also auto components manufacturers, and has led to the creation of a self-sustaining ecosystem for the automotive industry.
Surana and Surana International Attorneys (SSIA) conducted for ASSOCHAM a case study to evaluate the potential for high-tech, high-value sectors Tamil Nadu can venture into. Preliminary study revolved around South Australia which diversified into defence manufacturing from its well-developed automotive manufacturing capability. The businesses which were once involved in auto components manufacturing, engineering design and tooling, are now working on the construction of multibillion-dollar of navy frigates and offshore patrol vessels.
Defense manufacturing cluster for TN
We put together a case for Tamil Nadu to venture into the creation of a defence manufacturing cluster ranging from OEMs to sub-systems to small parts and components production. A Corridor was conceived and the proposal submitted to the Central and state governments. The idea received a positive response from Union Ministers Arun Jaitely and Nirmala Sitharaman, and Tamil Nadu was accorded the Defence Industrial Corridor project.
An expert committee to advise and guide the state government was formed. The various steps that have been undertaken include, understanding the needs of the stakeholders such as OEMs and MSMEs, the role of the state government and the role of the stakeholders in the project. The need to create awareness among MSMEs was of primary concern. A legal risk management workshop was conducted.
The ease of doing business in the defence sector, especially for MSMEs, is of considerable concern. Various challenges such as: “No Cost No Commitment” policy of procurement, the long gestation period for the trials and testing project, clarity specification, centralised certification and testing facilities and changes in specifications, delays in payments financial assistance provided, etc., were analysed and solutions sought n
