October 8, 2014

Centre clears 19 defence projects, boosts Make in India campaign

Giving a push to the Make in India drive, the government cleared 19 defence proposals of various companies including Punj Lloyd and Bharat Forge that had been pending for the last few years.

This is a result of the policy change by the BJP government in August, which allowed more than one Indian company to hold a cumulative 51% share to encourage more domestic players in the sector. Earlier, it was mandatory for a single Indian company to own and control the company. The licensing committee chaired by the Department of Industrial Policy and Promotion (DIPP) secretary Amitabh Kant last week cleared 19 proposals granting of industrial licences.

Applications for defence production from major companies such as Reliance Aerospace Technologies, Bharat Forge, Mahindra Telephonic Integrated Systems, Punj Lloyd Industries Limited, Mahindra Aero Structure and Tata Advanced Materials were approved. In the case of another 14 pending defence applications, the companies were informed that licences were not required anymore as a vast number of defence items have been delicensed. The government reduced the items requiring industrial licences by about 60% in June this year.

Dual-use items, having military as well as civilian applications, now do not require industrial licences from the defence angle. The foreign direct investment ( FDI) limit in defence was raised to 49% in August to address large imports by indigenising production. India is one of the largest defence importers in the world. The government also allowed 24% portfolio investment through the automatic route.

"It is expected that clearance of these 33 applications and the deregulation of defence product list excluding a large number of components from purview of industrial licensing will provide a major impetus to advanced manufacturing in defence sector," the government said on Tuesday. The committee also discussed the possibility of scrapping the stipulation on annual capacity in the lndustrial licence so as to permit the sale of licensed items to other entities under the control of the home ministry and state governments, public sector units and other valid defence-licensed companies without requiring the approval of Department of Defence P.roduction (DoDP).


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