Aerospace & Defence: How MSMEs can build a sustainable business

Date posted: Wednesday 15 February 2017

A multi-billion dollar sector, the Indian aerospace and defence (A&D) sector is a focus market for many global A&D companies. The Indian market is also attractive for domestic industrial product conglomerates aspiring to achieve non-linear growth via positions across the A&D value chain across platforms. This is a result of tightening of defence budgets in Western countries, while countries like India and Saudi Arabia continue to spend ever increasing amounts on defence. We discuss in this article how MSMEs have built or can build a sustainable defence business in India: Choose a product/service core to company DNA; Articulate a medium term go-to-market approach and Focus on capability building. The government has recognised the importance of MSMEs in developing A&D supply base in India with Defence Procurement Procedure (DPP) 2016 reserving specific categories and size of ‘Make’ programs for MSMEs. A&D is an involved business, and cannot just be ‘topped-up’ onto an existing line of business – you are either in it for the right reasons and with the right expectations, or out of it. This is the cost of getting into a business where entry barriers are high, but so are switching costs of your customers once you are in the game.

(Economic Times)

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