DIPP clears 19 proposals, including six for defence production

The licensing committee of the Department of Industrial Policy and Promotion (DIPP), chaired by its secretary, last week cleared 19 proposals for grant of industrial licences, including six in the defence sector, giving a big boost to the prime minister's ''Make In India'' policy.

These included applications for defence production from major players like Reliance Aerospace Technologies Limited, Bharat Forge Limited, Mahindra Telephonic Integrated Systems Limited, Punj Lloyd Industries Limited, Mahindra Aero Structure Pvt Limited, Tata Advanced Materials Limited.

Many of these proposals were pending with the government for last several years, an official release noted.

This has been made possible because of the simplification of FDI policy, which has raised the FDI cap in defence from 26 per cent to 49 per cent and the permitted portfolio investments up to 24 per cent of the total equity of the investee / joint venture company under automatic route and doing away with requirement of 51 per cent equity ownership by a single Indian investor/company.

In the case of another 14 pending defence applications, applicants were informed that licences were not required anymore as a vast number of defence items have been delicensed.

The government had earlier issued a list of defence products, wherein a large number of parts/components, castings/ forgings etc. have been excluded from preview of industrial licensing. Similarly, dual use items, having military as well as civilian application (unless classified as defence items) do not now require Industrial Licence from defence angle. This has enabled domestic and international companies to undertake manufacturing without going through a lengthy process. The applicant company now only needs to file an industrial entrepreneur memorandum (IEM) for these items and implement his project 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 the purview of industrial licensing will provide a major impetus to advanced manufacturing in defence sector.

The committee also discussed the possibility of removal of stipulation of annual capacity in the industrial licence as also to permit of sale of licensed items to other entities under the control of MHA, state governments, PSUs and other valid defence licensed companies without requiring approval of DoDP. These have been largely agreed on and the above stipulation would be relaxed subject to submission of bi-annual returns by the unit. The DIPP would be shortly notifying the above decision by issue of a press note.

Government has taken a series of measures to improve the ease of doing business in India. The emphasis has been on simplification and rationalization of the existing rules and introduction of information technology to make governance more efficient, effective, simple and user friendly.

The measures include 24X7 availability of online filing of industrial license and industrial entrepreneur memorandum applications, increasing initial validity period of industrial license to three years, streamlining the processing of applications for grant of extension of validity of industrial licence, treating partial commencement of production as commencement of production for all the items included in the licence, adoption of highly contemporary industrial classification code NIC 2008 in place of NIC 1987 and doing away with the requirement of affidavit from the applicants of defence industrial licence, with the issue of the Defence Security Manual.