CII and Ernst & Young made a report called ‘Enhancing role of SMEs in Indian Defence Industry’ in 2009. It was reported that about 20-25% of components and sub-assemblies were supplied by 6,000 SMEs to Ordnance Factories, Defence Public Sector Undertakings, DRDO and the armed forces. Special policies were laid down by the Government of India which helped in increasing the supply of national and international defence majors. There had been a rise in business opportunities in defense and aerospace sectors.
A cumulative defence budget of USD 26.5 billion was observed in 2009. Joint ventures and technical collaborations were set up by Indian SMEs attracting the attention of foreign OEMs, Tier I and Tier II vendors. 44 percent of the respondents revealed that improvements had to be implemented in defence offset opportunities.
The report advised an improvement of information technology and automotive industries for design, development and manufacture in aerospace and defence sector. It also revealed the importance and need of domain knowledge development. Certain guidelines were given regarding licensing procedure and other complementary activities for the SMEs.