Millennium Post

Till January, 2015, govt cleared 251 defence-industrial licences

Till January, 2015, the central government has sanctioned 251 defence-industrial licences to covering 150 companies. Of them, 49 licenced companies with 72 licences have reported to the government that they commenced production.

The government has also green-signalled 31 joint ventures with offshore units under the Foreign Direct Investment (FDI) route. This was stated by the Minister of State for Defence, Rao Inderjit Singh at the Rajya Sabha Tuesday. The MoD has also revised the control list of defence products list and most parts/raw materials/components in that list have been taken off, the minister said.

Singh also stated that the some of the clauses that constitute the FDI hike proposal. One of the provisions is, “the management of the company/partnership firm owning the Industrial Licence should be in Indian hands with majority representation on the board as well as the chief executive of the company/partnership firm being resident Indians. This condition is, however, not applicable to cases of foreign investment above 49 per cent. Another requirement of the FDI clearance is the “Adequate safety and security procedures that would need to be put in place by the licensee.

The Indian Licensed Defence Companies shall comply with the security guidelines applicable to them as per security instructions/architectures prescribed in the “Security Manual for Licence Defence Industries” available based on their categorisation. Some of the important guidelines of the Security Manual includes External Security Audit of the ILDCs by intelligence Agencies once in two years and cyber security audit by CERT-IN empanelled auditors once every year.” Further, “the licensable defence items as mentioned in the license, produced by the private manufacturers will be primarily sold to the MoD.”  Some of these items can also be sold to other govt entities under the control of the ministry of home affairs, state governments, PSUs and other valid defence licenced companies, without prior approval of Department of Defence Production (DDP).

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