The public administration, defence, and other services sectors have demonstrated significant growth in recent years, underscoring their expanding role in India’s economic framework. This sector not only remains essential for national security and governance but also serves as a key driver of overall economic progress. The gross value added (GVA) has seen consistent growth, rising from Rs24.2 lakh crore in FY19 to Rs39 lakh crore in FY24. This steady upward trend highlights the sector’s resilience and growing importance in the country’s broader economic landscape.
According to a 1Lattice report, the Indian defence manufacturing sector is undergoing a transformation, driven by government initiatives aimed at enhancing self-reliance and reducing dependency on imports. With the growing demand for indigenous defence solutions grows, local manufacturers are stepping up to meet the needs of the Indian armed forces and beyond.
Against this backdrop, SMPP is an indigenous designer and manufacturer of defence equipment, including ammunition components, personal protection products, and protection kits for land, air, and sea platforms. It commenced operations in 1985 as a manufacturer of biodegradable packaging using a vacuum moulding process with recycled materials such as cardboard, newspapers, and books. In 1992, it extended the application of this process to manufacture combustible cartridge cases using in-house developed moulds and machines.
SMPP’s management team has extensive experience in the defence manufacturing industry. Shiv Chand Kansal has 33 years of experience in the sector with the company and holds a master’s degree in chemical engineering and a PhD from the Indian Institute of Technology, Bombay. Ashish Kansal has over 20 years of experience in the defence manufacturing industry with the company and holds a bachelor’s degree in textile technology from the Indian Institute of Technology, Delhi, and a master’s degree in science from the Georgia Institute of Technology.
In 2008, the company established a manufacturing facility for personal protection products in Palwal, Haryana, and produced its first bullet-resistant boron carbide ceramic plates. Then, in 2014, it received an order to manufacture panels for armouring aircraft from a global aircraft manufacturer. Additionally, in 2018, SMPP received an order from the Ministry of Defence and successfully supplied 186,138 bullet-resistant jackets of Level III and III+ protection ahead of the scheduled delivery date.
Pioneers in defence innovation
SMPP’s achievements include pioneering the development of combustible cartridge cases in 1992 in response to a global tender issued by the Defence Research and Development Organisation (DRDO). It was the first Indian company to secure a patent for a protective band specifically designed to enhance the defence capabilities of bullet-resistant helmets against hard steel-core bullets fired from AK-47 rifles (Source: 1Lattice Report). SMPP is also among the few armour manufacturing companies in India producing bullet-resistant boron carbide plates.
Boron carbide, also known as ‘black diamond’, is one of the hardest and lightest materials, making it particularly suitable for lightweight armour solutions. SMPP is the market leader in India for personal ballistic protection products made of composites, in terms of the value of domestic government orders awarded in Fiscal 2024. Since 2008, SMPP has been exporting personal protection products and has supplied its products to customers in 23 countries across Europe and Asia.
As part of the company’s proposed forward integration initiatives, SMPP is currently establishing an ammunition manufacturing facility in Himachal Pradesh. Its differentiated value proposition lies in supplying products with a strong focus on critical safety standards, with the objective of being recognised as a trusted brand in the defence sector.
Shiv Chand Kansal, Chairman, states: “We conduct our business with the mission to protect those who protect the nation and a vision to lead the way in equipping armed forces with advanced technological solutions. The company’s products are designed to provide critical protection, allowing users to safely and securely perform their duties and protect those around them in life-threatening situations.”
According to the 1Lattice Report, given the ongoing geopolitical tensions along its borders, India must strengthen its indigenous defence manufacturing capacities and reduce reliance on imports, particularly in the event of prolonged conflicts. The government has implemented significant reforms in the defence sector, demonstrating a strong commitment to minimising foreign dependence and building a robust domestic defence manufacturing base.
The defence manufacturing industry in India presents high entry barriers for new players due to the capital investments needed to establish manufacturing facilities, the requirement to customise products for specific environments, the need for licences such as the Defence Industrial Licence under the Industries (Development and Regulation) Act, 1951, and The Arms Act, 1959, as well as the necessity for contiguous land parcels to comply with safety distances mandated by the Explosive Rules, 2008, for factories licensed for the manufacture and storage of explosives. Additionally, lengthy customer approval cycles further add to the challenges of entering the sector (Source: 1Lattice Report).
SMPP’s strong focus on research and development has enabled it to develop a range of personal protection products and armour kits. “SMPP’s emphasis on R&D has allowed us to deliver protective solutions and continually enhance our product offerings based on customer needs and industry trends. It has also helped us secure a number of registered patents and designs for our products,” says Ashish Kansal, CEO.
SMPP is among the few armouring companies in India to manufacture bullet-resistant boron carbide plates. The company has adopted a proprietary method of producing boron carbide ceramics with a nominal density of 2.58 g/cc.
India’s defence budgetary allocation has steadily increased over the past 5 years, growing at a compound annual growth rate (CAGR) of approximately 7.6 per cent between FY20 and FY25, reaching approximately Rs6.2 lakh crore in FY25. India’s growing economy, resource availability, regional security concerns, and military modernisation efforts have propelled its defence spending. This increase reflects the government’s commitment to strengthening military capabilities. Alongside this budget growth, the government has aggressively pursued indigenisation policies, including the issuance of Positive Indigenisation Lists (PILs) and prioritising domestic procurement under DAP-2020, ensuring that a significant portion of this spending supports the development of indigenous defence technology and manufacturing.
SMPP’s emphasis on R&D has allowed us to deliver protective solutions and continually enhance our product offerings based on customer needs and industry trends
Strategies for growth
SMPP is planning to raise Rs580 crore of fresh capital. It is planning to forward integrate its ammunition components business to capitalise on the global demand for ammunition and the favourable Government procurement policy. SMPP is in the process of setting up a planned ammunition manufacturing facility, through investment in its subsidiary, SMPP Ammunition Private Limited, to manufacture ammunition for the armed forces in Solan, Himachal Pradesh. The new facility is anticipated to be the largest private-sector ammunition manufacturing site in India, as per the 1Lattice Report.
SMPP intends to commence the manufacturing of ammunition of 155 mm calibre at the Planned Ammunition Manufacturing Facility, for use in military applications such as artillery. SMPP intends to eventually expand production to include other large and medium calibre ammunition, which can be undertaken by minor adjustments to the plant and equipment proposed for the Ammunition Project. SMPP may further look to set up in-house production facilities for raw materials required for the manufacture of ammunition, including nitrocellulose (NC), nitroguanidine (NG), NC-NG paste, single base, double base and triple base propellants.
“We intend to evaluate opportunities to expand our presence and supply our products in Latin America, the European Union, the Middle East and the Asia Pacific regions. We will also evaluate entering into joint marketing agreements with other manufacturers to combine our products and sell integrated kits to armed forces.”
SMPP continues to focus on product innovation and design and further diversify its portfolio. The company is focused on investing in technology, equipment and a skilled workforce with the aim of delivering high-quality, innovative and technology-driven products in response to customer requirements, thereby strengthening relationships with customers across a range of product categories. SMPP intends to introduce advanced solutions, including lighter weight protection products, armour-piercing incendiary (API) protection helmets, advanced protection helmets for Sikh troops, guided ammunition, and drone-delivered bombs. It intends to manufacture advanced products with integrated sensors to cater to the Future Infantry Soldier as a System (F-INSAS) program of the Government. SMPP intends to increase the indigenous content in products, such as developing bullet-resistant products using indigenous HPPE fabrics and domestic processing of ceramic powders.
Finally, SMPP will evaluate inorganic growth opportunities, in keeping with its strategy to enter new geographies, grow and develop market share or add new product categories. It may consider opportunities for inorganic growth, such as through acquisitions or strategic collaborations, if, among other things, they help the company enter new markets, consolidate its market position in existing business verticals, unlock potential efficiency and synergy benefits, strengthen and expand its product portfolio, and enhance depth of experience, knowledge base, and know-how.