Seven new defence public sector undertakings, carved out of the erstwhile Ordnance Factory Board (OFB), were on Friday dedicated to the nation by Prime Minister Narendra Modi as part of a major reform initiative to boost India's defence production.
Defence Minister Rajnath Singh said the government will provide support to the companies initially through financial and non-financial interventions if required.
The defence ministry said the companies commenced work on October 1.
The event to launch the new companies was organised on a day the country celebrated 'Vijayadashami'.
The Union Cabinet on June 16 had approved a long-pending proposal to restructure the over 200-year-old Ordnance Factory Board that operated 41 ammunition and military equipment production facilities into seven state-owned corporate entities to improve its accountability, efficiency and competitiveness.
The OFB was dissolved on October 1 and its assets, employees and management were transferred to the seven companies.
In his address, PM Modi said the seven new companies would form a strong base for the military strength of the country in the times to come.
The seven new defence companies are Munitions India Limited (MIL), Armoured Vehicles Nigam Limited (AVANI), Advanced Weapons and Equipment India Limited (AWE India), Troop Comforts Limited (TCL), Yantra India Limited (YIL), India Optel Limited (IOL) and Gliders India Limited (GIL).
In his video address, PM Modi noted the auspicious occasion of 'Vijayadashami' and the tradition of worshipping arms and ammunition on the day.
"He said, in India, we see power as a medium of creation. He remarked that with the same spirit, the nation is moving towards strength," a government release said.
Describing the decision to convert the OFB into seven defence companies as "historic", Defence Minister Singh said the move reflects the government's resolve of achieving self-reliance in defence production.
Noting that the new companies will have full potential for growth, Mr Singh said, if required, the government will provide support initially through financial and non-financial interventions.
He said the reform measure will provide autonomy to these companies and improve accountability and efficiency.
"The objective of this restructuring is to transform ordnance factories into productive, and profitable assets, improve expertise in the product range, increase competitiveness, improve quality, enhance cost-efficiency and ensure self-reliance in defence preparedness," he said.
Mr Singh hoped that in the times of come, these new companies would not only play an important role in the defence manufacturing ecosystem but would also be engines of growth for the Indian economy.
He added that restructuring is a continuing process, not an end in itself.
The defence minister stated that all employees of the erstwhile OFB (Group A, B and C) belonging to production units will be transferred to the corporate entities on deemed deputation for a period of two years without any change in their service conditions as central government staff.
"The country's defence sector has scaled greater heights due to the reforms taken by the government in the past few years. We have created a conducive ecosystem for exports and FDI," he said.
Mr Singh added that the Ministry of Defence has set a target of achieving a turnover of Rs 1.75 lakh crore in aerospace and defence goods and services by 2024, including exports of Rs 35,000 crore.
Jayant Patil, President of the Society of Indian Defence Manufacturers (SIDN) welcomed the setting up of the seven companies.
"Defence Industry of our country is aspiring to become a global brand. As envisioned by the prime minister, the industry can leverage mutual strengths to enhance India's competitiveness with global quality, reliability backed by research and development and innovation to be a force to reckon with in the global stage," he said.