Licence rules, defence sales norms eased

Discussion in 'Defence & Strategic Issues' started by AVERAGE INDIAN, Oct 21, 2014.



    Sep 22, 2012
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    Detroit MI
    As part of its ongoing efforts to improve the ease of doing business in the country, the Narendra Modi government on Monday allowed companies to set up projects within seven years of securing industrial licence, a statement issued by the department of industrial policy and promotions (DIPP) said.

    Companies will henceforth get two extensions of two years each over and above the initial validity of three years for an industrial licence.

    This extension is now allowed by supersession of Press Note 5 dated July 2, 2014. Simultaneously, the government has decided to deregulate the annual capacity for defence items for industrial licence.

    But the defence licencee will have to submit half-yearly production return to the DIPP and to the defence ministry.

    India is considered to be one of the toughest places to do business in.

    In a recent study on ease of doing business, the World Bank had put India in 134th position, far lower than neighbouring Sri Lanka’s 85th and Pakistan’s 110th positions in a ranking of 180 countries. Even China ranked higher at 96th.

    One of the challenges faced by Indian trade and industry is the complexity of laws and the gap between policy pronouncements and their implementation by different agencies.

    Monday’s decision will also allow defence production licencees to sell defence items to government entities under the home ministry, state governments and public sector undertakings without prior approval of the defence production department.

    They will also be allowed to sell to other valid licensed defence companies. However, for sale of items to any other entity, the licencee shall have to take prior permission from the defence production department, the statement said.

    The announcement came as a relief to industry which, in several cases, saw the licences expiring before they would get other clearances, requiring them to apply afresh. Analysts said the move would be of great help, particularly to infrastructure companies, as projects have a long gestation in this space and require separate clearances for environment and fuel linkages.

    Govt. eases norms for private defence firms - The Hindu

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