Government approves 33 long-pending defence projects

The government has cleared 33 long-pending defence projects, including those of Reliance Aerospace, Bharat Forge, Mahindra Telephonic Integrated Systems and Tata Advanced Materials, a move that is expected to boost advanced manufacturing and attract huge investment. The decision would also boost Prime Minister Narendra Modi's 'Make in India' campaign.

Applicants in 14 pending cases have been informed that licences are not required anymore as a vast number of defence items have been delicensed.

According to a Department of Industrial Policy and Promotion (DIPP) statement on Tuesday, it has been possible to approve these cases as a consequence of the simplification of the foreign direct investment (FDI) policy. The FDI cap in defence has been raised from 26 per cent to 49 per cent, and portfolio investment up to 24 per cent of the total equity of the investee/joint venture company has been permitted under the automatic route. The requirement of 51 per cent equity ownership by a single Indian investor/company has been done away with.

The defence products list for industrial licensing has been issued, wherein large number of parts/components, castings/forgings, etc. have been excluded from preview of industrial licensing.

Similarly, dual use item, having military as well as civilian application (unless classified as defence items) now do not require an industrial licence from the 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 for these items and implement his project through the automatic route.

"It is expected that the approval for these 33 applications and the deregulation of the 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 statement added.

The Licensing Committee also discussed possibility of removal of stipulation of annual capacity in the industrial licence as also to permit sale of licensed items to other entities under the control of home ministry, state governments, PSUs and other defence licensed companies without requiring approval of the Department of Defence Production.

It was agreed that the above stipulation would be relaxed subject to submission of bi-annual returns by the unit. DIPP would soon notify the above decision by issue of a press note, the statement said.