Thursday, June 26, 2014

Govt notifies defence items that need industrial licence OUR BUREAU business line

Streamlining will help attract investments, say analysts
In an effort to streamline the industrial licensing process for defence equipment, the Government, on Thursday, notified the list of defence items requiring industrial licences.
Industrial licences will now be required to make warships of all kinds, arms and ammunition and allied items of defence equipment, tanks and other armoured fighting vehicles and defence and spare aircraft and their parts.
According to sources, dual-use items that have military as well as civilian applications, other than those especially mentioned in the list, will not require industrial licences from the defence angle. Sources also maintain that these clarifications will help attract investment from private companies.
Terming the move by the Department of Industrial Policy & Promotion (DIPP) as a “great move,” Amber Dubey, Partner and India Head, Aerospace and Defence, KPMG, said that it will help create a conducive policy environment which is not just FDI-centric but encompasses the entire gamut of the defence procurement process.
“This will significantly increase the ease of doing business in India especially for dual use items,” he pointed out.
According to Amber the Government must ensure time-bound grant of licences and complete clarity on terms such as ‘accessories and parts thereof’ to avoid ambiguous interpretations.
Pruning of list
Welcoming the decision, Baba N Kalyani, Chairman, CII National Committee on Defence, said with this move the Government had pruned the list and kept it to the bare minimum. A section of the industry is also viewing the Government’s move as an attempt to prepare the ground for allowing foreign direct investment in the defence sector.
(This article was published on June 26, 2014)

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