DEFENCE MANUFACTURING

Jan. 7, 2019

On January 1, 2019, the government issued a notification simplifying the process for approval of manufacturing of a range of defence and aerospace equipment and components by private industry.

About:

This notification, which supersedes DIPP’s earlier press note of 2014 on this issue, segregates defence items in two categories covered by two different Acts — the Industries (Development and Regulation) Act, 1951, and the Arms Act, 1959.
The simplification of Defence manufacturing rules was done by bringing a range of defence and aerospace equipment and components by private industry, under the licensing authority of the Department of Industrial Policy and Promotion (DIPP), which is under the Ministry of Commerce and Industry.
Under the recent notification, Items are listed in three categories: (1) defence aircraft, (2) warships of all kinds, and (3) allied items of defence equipment.

Comment:

The most significant aspect is that warships of all kinds, surface and sub-surface, have been included in the listing.
Reducing the list of defence items requiring industrial licences by removing the requirement of licensing for ‘parts and components of the equipment’, would benefit Tier-I/Tier-II vendors and thus giving a boost to the small and medium enterprises (SMEs)
This move is also expected to help foreign Original Equipment Manufacturers (OEM) looking for partnerships with the private sector.

Source : The Hindu