Himachal Eyes Role in Attracting Defence MSMEs, Manufacturing

With preparations underway for the three-day HIM MSME Fest 2026 in Shimla, North India’s largest hill town and a historic venue for major summits and accords between 1906 to 1972, a quiet sense of anticipation and warmth hangs in the cool breeze over the iconic Ridge.

The Ridge, the Fest venue, will come alive with weavers, traditional artisans, and trailblazers of Himachal’s rural economy, presenting products shaped by craftsmanship, innovation, and tradition to tell the success stories of the state’s journey to remarkable growth and development.

The state of Himachal Pradesh came into being in 1948 as a result of the integration of 28 princely states. Thereafter, the city, which doubles as the capital of Himachal Pradesh and a hill station, also witnessed the signing of the ‘Simla Agreement’ of 1972.

On January 3, when the three-day Fest begins, the state’s industries department will facilitate finalisation of new collaborations, featuring the finest handicraft and handloom products, women-led business enterprises, e-commerce marketing, and the holding of reverse buyer-seller meetings, alongside One District, One Product (ODOP).

This isn’t all, says Additional Chief Secretary (Industries) R D Nazeem, adding, “There are several emerging areas where Himachal Pradesh is going to make a strong pitch in the country’s overall defence production, AI, green mobility, and data centers”

He says climatic conditions and a supportive industrial ecosystem place Himachal Pradesh well for next-generation and niche defence manufacturing. Besides the industrial investments, the small investors and MSMEs can supplement the growth of defence-related industry and the manufacturing of next-gen defence equipment.

Himachal Pradesh, indeed, has been proactively mobilising investments in the defence manufacturing sector. The state has a sizeable presence of defence-related manufacturing enterprises, which is expected to significantly expand in 2026, though the state’s primary industries have been pharmaceuticals, tourism, hydro-power and textiles.

Officials inform that nearly two dozen defence equipment manufacturing units are already in operation in the districts of Solan, Una, and Sirmour. There is an upcoming ammunition plant coming up with a large manufacturing facility on 800 acres in the Solan district.

“The state government has also signed Memorandums of Understanding (MoUs) for the production of drones, which will be used for public safety, law enforcement, and agricultural purposes. The government is paying attention towards boosting its Micro, Small, and Medium Enterprises (MSMEs) sector and encouraging its participation in the defence supply chain,” informs Industries Minister Harshvardhan Chauhan.

He says, “While the state does not host large public-sector defence factories like some other bigger states and regions, we have the potential to play a crucial supporting role through its industrial clusters and MSMEs”.

Chauhan recalls that Himachal has already joined hands with the Centre’s Atmanirbhar Bharat and defence indigenisation push. The MSMEs will be encouraged and supported to diversify into defence aerospace manufacturing. Under the new industrial policy, which will be announced soon, the government will provide attractive industrial incentives, offer skill development support for quality certifications.

In the industrial belt of Baddi–Barotiwala–Nalagarh, Una, Kangra, and Shimla districts, there have been several units engaged in producing components and sub-assemblies for defence platforms. “These include precision-machined parts, fasteners, control panels, electronic components, optical instruments, and specialised cables supplied to defence public sector undertakings (DPSUs), ordnance factories, and private defence majors,” says Additional Director (Industries) Tilak Raj Sharma, Chief Coordinator for the Fest.

Himachal Pradesh is already contributing to defence logistics through specialised textile manufacturing. Units in Kangra, Una and Solan supply high-altitude clothing, thermal wear, uniforms, tents, and parachute fabrics for army and paramilitary forces deployed in high altitude and cold regions. Not to forget the state’s strong pharmaceutical base—Asia’s biggest hub supplying all sorts of medicines, medical equipment, and health consumables for the armed forces. “This sector has gained added relevance during emergencies and extended deployments,” he informs.

Government sources say a proposal is under active consideration, at the policy level, to declare Nalagarh in Solan district as a Defence Corridor and attract new investments in the strategic industrial sector.