The Baddi–Barotiwala–Nalagarh industrial belt, long known as Asia’s largest pharmaceutical hub, is set to become Himachal Pradesh’s first major defence production zone with a private ammunition plant at Nalagarh starting operations by March 2026.
The SMPP facility will manufacture 155 mm artillery shells to meet critical Army requirements, reduce import dependence, and strengthen India’s self-reliance in defence, aligned with the MoD’s ‘Make in India’ and import-ban policies.
The project marks a strategic diversification of Himachal’s economy, generating MSME opportunities, skilled employment, and technology-driven growth, while positioning the state on India’s defence manufacturing map and paving the way for a proposed defence corridor at Nalagarh
Himachal Pradesh is all set to break into the defence production sector with the Baddi-Barotiwala-Nalagarh industrial belt, till now more known as Asia’s biggest pharmaceutical hub, emerging as the state’s new destination for manufacturing and supplying military necessities.
The senior industries department officials confirmed to Outlook on Wednesday that a mega private military ammunition plant, being set up by M/s Shakti Missile Private (SMPP) Limited at Nalagarh, bordering Chandigarh, will start production by March 2026.
The plant, aimed at boosting India’s domestic manufacturing facility to meet the crucial operational needs of the defence forces, will manufacture 155 mm artillery shells, giving a significant push for 'Aatmanirbhar Bharat' (Self-Reliant India) in defence production.
With Himachal Pradesh getting ready to host the three-day HIM MSME Fest 2026 to accelerate its industrial and economic growth, the upcoming defence production facility will put the small northern hill state firmly on India’s defence manufacturing map.
“This will also mark the beginning of a strategic diversification of our industrial base beyond pharmaceuticals, agro-economy, and tourism. Providing fresh opportunities for MSMEs, skilled employment, and technology-driven growth will immensely benefit the state,” Chief Minister Sukhwinder Singh Sukhu hoped.
The larger aims, intended through the mega plant, are to reduce India’s reliance on imports and cater to the Army's extensive requirements for modern artillery systems like Bofors, Dhanush, and ATAGS.
The entry of the private sector, both with GoI collaborations and other strategic facilitators, is seen as part of a broader trend of private sector involvement in defence manufacturing, previously dominated by state-owned entities.
Experts believe that setting up a massive plant for 155 mm artillery ammunition manufacturing will make India militarily strong and self-reliant to provide sustained supplies in the event of a prolonged conflict, particularly when India is facing a two-front challenge from Pakistan and China.
Given the severe shortage of 155 mm ammunition, there is a pressing need to accelerate its production to prepare for potential future scenarios. Operation Sindoor and long-duration wars are some of the examples that are being increasingly cited. The Indian government has made a policy decision to reduce ammunition imports and instead procure all ammunition requirements from domestic sources.
The Ministry of Defence (MoD), under its ‘Make in India’ initiative, is now incorporating the private sector in its operational necessities to manufacture 155 mm ammunition. The Army’s requirements are not being fully met by the only DPSU (MIL), which is producing only limited quantities of this variety of ammunition, and import is no longer an option, as there are extreme shortages worldwide.
The MoD has implemented the new policy by providing long-term commitments and firm orders of 155 mm ammunition to private players. For implementation of this policy, the MoD has included the banning of imports of ammunition in the first negative list of 101 items, whereby the 155 mm artillery ammunition has is banned for imports since December 2022.
The SMPP has already participated in the two tenders of the Indian Army issued in the year 2021 for the procurement of BMCS (Bi Modular Charge Systems) and 155 mm Shells. Now that SMPP has also entered into an agreement with Rheinmetall-Denel Munitions (RDM) of South Africa to produce the utmost quality of this ammunition in India, the upcoming facility in Himachal Pradesh will play a significant role in the coming times, says officials of the Industries department.
The proposal is also underway to declare Nalagarh as a defence corridor and attract new investments in military equipment manufacturing, both through the large industries and MSMEs.
Reports said the SMPP has already booked orders for the installation of plant machinery from Germany. The machinery shipment will reach India and be installed in the Nalagarh plant by March 2026.
Meanwhile, reviewing the preparedness of the HIM MSME Fest 2026, Chief Secretary Sanjay Gupta informed that a major highlight of the Fest holding of a "CEO Interaction—Strategic Leadership Dialogue for Investment & Industrial Growth" on January 4, 2026, at Hotel Peterhoff, Shimla. “This high-level dialogue will be held in the presence of Chief Minister Sukhvinder Singh Sukhu,” he added.
Gupta informed that the industries department will have a closed-door leadership dialogue to bring together eminent Chief Executive Officers (CEOs), Managing Directors, Promoters, and Industry Leaders from priority and emerging sectors—Pharmaceuticals, Green Mobility, Food Processing, Dairy, Data Centers, and Defence—both from India and abroad. Conceptualised as a structured Business-to-Government (B2G) forum, it aims to foster meaningful discussions on investment opportunities, policy incentives, regulatory reforms, and long-term industrial growth prospects in the state.
This initiative reflects the state government’s commitment to collaborative governance, investor-centric policymaking, and ease of doing business, positioning Himachal Pradesh as a future-ready, sustainable, and globally competitive investment destination.
