July 4, 2015

Govt clears 16 defence licence proposals worth Rs613 crore

The government has issued 73 industrial licences to the defence sector since June 2014, against 50 such licences granted between 2011 and May 2014.
These include 16 proposals with a proposed investment of Rs.613 crore, cleared at a licensing committee meeting chaired by the secretary of the Department of Industrial Policy and Promotion (DIPP) on 10 June.
DIPP is a department under the ministry of commerce and industry.
According to a DIPP statement on Friday, the proposals cleared at the meeting include applications from Pipavav Defence and Offshore Engineering Co. Ltd, Tata Group, Samtel Thales Avionics Ltd, Solar Industries India Ltd, Titagarh Wagons Ltd and Premier Explosives Ltd.
The statement said many of these proposals were pending with the government for several years and were for the manufacture of helicopters, aircraft, radars, bulletproof jackets, bulletproof helmets and ammunition.
The other licences cleared by the government are for manufacturing tanks, rockets, missiles, mortar shells, grenades, warships, radar, electronic warfare systems, night-vision devices, howitzers, armoured vehicles, armoured personnel carriers and unmanned aerial vehicles, among other defence equipment.
Recently, the government increased the initial validity of a licence for the defence sector to seven years from three years, further extendable up to three years, in view of the long gestation period of defence contracts.
“In addition to this, the government has taken a series of measures to improve the ease of doing business in India. The government now expects that these measures will give a boost to private participation in the vast opportunities available for defence manufacturing in India,” DIPP said.
In a May report, legal consultancy Khaitan and Co. said the government is attempting to simplify the industrial licence process and its policy initiatives are being followed by swifter decision making, as evidenced by the grant of industrial approvals by DIPP to proposals for defence production by Reliance Aerospace Technologies Ltd, Bharat Forge Ltd, Mahindra Telephonic Integrated Systems Ltd, Punj Lloyd Ltd, Mahindra Aero Structure Ltd and Tata Advanced Materials Ltd.
The Khaitan report said physical registrations are no longer mandatory and applications for an industrial licence can now be made on the government of India’s e-Biz portal
“A number of leading industrial houses have nascent but growing defence industry divisions. These companies need to invest now in order to build capabilities that stretch their technical, operational, research as well as partnering capabilities so that they are considered world-class producers as industry matures,” a December report by industry lobby Assocham and audit firm PricewaterhouseCoopers said.

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