This report is an attempt to highlight means and measures necessary to enhance the participation of SMEs in Indian defence production. The report begins with highlighting relevance of SMEs as they constitute over 90% of all enterprises in most economies including India and are engines of economic growth and equitable development. They are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. By adding capacities and supplying cost efficient quality goods, SMEs play a key role in the development of economies. As new technologies and globalization reduce the importance of economies of scale, the potential contribution of smaller firms is increasingly enhanced. SMEs take emerging markets toward higher growth and enhance their international competitiveness. Considering the growing influence of SMEs, they can contribute significantly to the Indian defence sector and national endeavor of self reliance.