DRDO, PSU and Private Defence Sector News

[tribendra bisoi..]

Government has issued 584 Defence Licenses to 358 private companies for setting up of manufacturing units, including 107 licenses for weapon manufacturing .

 

[Dark Sorrow]

Government has issued 584 Defence Licenses to 358 private companies for setting up of manufacturing units, including 107 licenses for weapon manufacturing .

I have question
Why do we have Defense License?
Any private Indian company want to do R&D or manufacturing of products be it for defense or civilian use should not require a license.
We should get out of the license Raj.

Does anybody knows how does one gets Defense License?

 

[HitmanBlood]

I have question
Why do we have Defense License?
Any private Indian company want to do R&D or manufacturing of products be it for defense or civilian use should not require a license.
We should get out of the license Raj.

Does anybody knows how does one gets Defense License?

Licences are required to regulate industry. Defence companies deal with explosives and weapons. You don't want to see those end up in wrong hands. Also they have to maintain proper employee safety standards. Most importantly they also have to make sure that company asking for licence and technology is a real company willing to make products and it's not some shell company of China trying to get inside defence supply chain of India.

 

[tribendra bisoi..]

MOU signed between MIDHANI and Indian Air Force for developing and indigenizing various metal powders such as Titanium Alloys, Aluminum Alloys and Special Steel for the additive manufacturing process for the production of aviation items.

 

[ezsasa]

I have question
Why do we have Defense License?
Any private Indian company want to do R&D or manufacturing of products be it for defense or civilian use should not require a license.
We should get out of the license Raj.

Does anybody knows how does one gets Defense License?

license raj is capping of production, not the same as this license.

as far a concept of business license goes, it can't be the case that someone starts a company with 10,000 ₹ paid up capital and keeps going around saying i will manufacture fighter jet, then it becomes a free for all for fly by night operators. same as infra contracts, all infra companies do not get all major govt infra contracts, there are grades based on past contracts undertaken.

 

[Dark Sorrow]

Licences are required to regulate industry. Defence companies deal with explosives and weapons. You don't want to see those end up in wrong hands. Also they have to maintain proper employee safety standards. Most importantly they also have to make sure that company asking for licence and technology is a real company willing to make products and it's not some shell company of China trying to get inside defence supply chain of India.

Majority of defense companies in India are software companies or OEM, manufacturing their proprietary product (generally electro-mechnical products like drone or support items like PPE).
Very few companies handle hazardous material.

As for PRC entering supply chain every company has to provide BoM and vendor details in tender. If software is present one has to open software for review.

We as a nation import semi-conductor items and lot of this electronic items are imported from PRC.

At the end of day every purchase and selling party is thoroughly reviewed.

We can let go with this defense license and let free market run its course.

Till recently private sector was not allowed to develop or manufacture drones.

 

[Dark Sorrow]

license raj is capping of production, not the same as this license.

as far a concept of business license goes, it can't be the case that someone starts a company with 10,000 ₹ paid up capital and keeps going around saying i will manufacture fighter jet, then it becomes a free for all for fly by night operators. same as infra contracts, all infra companies do not get all major govt infra contracts, there are grades based on past contracts undertaken.

Such licenses are an entry barrier especially to start-ups.
A company can claim anything but won't be able to get order.
Fair review and strong vigilance are the prime need of day and not licenses.
If we want to develop defense MIC eco-system license like this should be scrapped.

 

[ezsasa]

Such licenses are an entry barrier especially to start-ups.
A company can claim anything but won't be able to get order.
Fair review and strong vigilance are the prime need of day and not licenses.
If we want to develop defense MIC eco-system license like this should be scrapped.

let's look at it from a customer, lender and stake holder perspective, someone needs to protect their interests as well. these folks invest in outcomes, they can't spend time and resource to check if their investments are sound at every turn, they can't keep sending someone to check if things are going well in the factory on a daily basis, that's not their job, that's not their expertise.

so the state acts as a middle man and takes care of a few basics and minimum standards. for extra scrutiny, there are non governmental institutional certifications to take care of those. state also needs to keep an eye on investor confidence. even within the existing system, there are scams. without the state intervention the scams would be 100x.

i personally have a few experiences on how some folks promise the moon in unregulated space.

 

[Dark Sorrow]

let's look at it from a customer, lender and stake holder perspective, someone needs to protect their interests as well. these folks invest in outcomes, they can't spend time and resource to check if their investments are sound at every turn, they can't keep sending someone to check if things are going well in the factory on a daily basis, that's not their job, that's not their expertise.

so the state acts as a middle man and takes care of a few basics and minimum standards. for extra scrutiny, there are non governmental institutional certifications to take care of those. state also needs to keep an eye on investor confidence. even within the existing system, there are scams. without the state intervention the scams would be 100x.

i personally have a few experiences on how some folks promise the moon in unregulated space.

What you are talking about is from financial aspect.
These regulation are already taken care by SEBI, RBI and MOCA.
We don't need additional regulation.

When you apply via tender you will have to disclose all your information (not limited to current finance, investment source, production facility, component sourcing, etc.) and all this is physically verified for finalist including background checks.

To subservient this people might use corruption but again who can bribe during tender audit can also bribe during license audit.

 

[Chinmoy]

We can let go with this defense license and let free market run its course.

"The licensees are required to follow the Security Manual notified by the Department based on the product of manufacturing and their categorization for which an industrial license is granted to a company. "

 

[Chinmoy]

To subservient this people might use corruption but again who can bribe during tender audit can also bribe during license audit.

"The Industrial Licence applications so received in the Ministry of Defence are examined by a Standing Committee on Private Sector Participation in Defence Production and comments are then accordingly sent to licensing authorities. "

Means, even to bribe for a license, you have to be one with influence in MOD.

 

[HitmanBlood]

Majority of defense companies in India are software companies or OEM, manufacturing their proprietary product (generally electro-mechnical products like drone or support items like PPE).
Very few companies handle hazardous material.

As for PRC entering supply chain every company has to provide BoM and vendor details in tender. If software is present one has to open software for review.

We as a nation import semi-conductor items and lot of this electronic items are imported from PRC.

At the end of day every purchase and selling party is thoroughly reviewed.

We can let go with this defense license and let free market run its course.

Till recently private sector was not allowed to develop or manufacture drones.

The current licence system is not same as previous socialist era entry barriers.

All business, especially those who are in manufacturing business require licence. Even companies that make simple potato chips require FSSAI licence. Here we are talking about defence and national security.

The licence is just an approval from government that makes sure that company doing business follows rules and regulations. When it comes to defence we need companies that follow proper government rules. The nature of defence is such that companies have to work very closely with security forces and gov PSUs. Even a software developer like you have mentioned works very closely with various gov agencies and they have their fair share of sensitive information. In such environment you need a strong framework of regulations.

Let me give you an example. Will you buy medicine or food from a company with no licence, or will you trust a brand that has all necessary licences? Here we expecting our armed forces to buy software, PPEs, drones and whatnot from some random Gupta bhaiya from UP.

Your point that companies go through extensive background checks before placing order is correct. However that doesn't cover many aspects of how that company is operating. Also under current government India is moving towards public private partnership. Private defence companies are getting subsidy and technology from R&D pool of PSUs.

Lastly a completely unregulated market will result into many irregularities and court cases. Our forces will have to appear before courts everyday and explain technical details just because some random startup wasn't selected and they decided to go to courts.

Free market means lack of monopolies and not lack of regulations. EU, US all have lots of laws and regulations too. What you are suggesting is Anarcho-Capitalism regarding defence companies. This model is a utopian one and not practice.

 

[ezsasa]

What you are talking about is from financial aspect.
These regulation are already taken care by SEBI, RBI and MOCA.
We don't need additional regulation.

When you apply via tender you will have to disclose all your information (not limited to current finance, investment source, production facility, component sourcing, etc.) and all this is physically verified for finalist including background checks.

To subservient this people might use corruption but again who can bribe during tender audit can also bribe during license audit.

sure, let's narrow it down to Indian defence procurement.

in this case, department of defence production in conjunction with MoCA issues defence related licences, and forces are the customer.

when forces issue a tender or RFP, they don't have the authority/capability to conduct production audits in the factory. so these licenses filter out some of the headaches in aspect of procurement which fall in their domain. even if there is an audit, forces will stick to limited points in their checklist not the entire manufacturing and financial process checklist.

and there is also the case in earlier days, where companies join the tender to derail it(nuances apply). it happened in armoured vehicles, and also happened in VSHORADS some years back.

 

[binayak95]

Such licenses are an entry barrier especially to start-ups.
A company can claim anything but won't be able to get order.
Fair review and strong vigilance are the prime need of day and not licenses.
If we want to develop defense MIC eco-system license like this should be scrapped.

Speaking as someone who has experience with def-tech - licenses are VERY much needed. Some companies have really shitty security and financial health - they are easy for takeover and other mischief. Licenses make sure you maintain a bare minimum of security and have some tech knowhow.

 

[Butter Chicken]

Defence Ministry clears arms procurement cases worth over Rs 28,732 crore for defence forces including armed swarm drones, carbines, and bulletproof jackets.

 

[Cheran]

Defence Ministry clears arms procurement cases worth over Rs 28,732 crore for defence forces including armed swarm drones, carbines, and bulletproof jackets.

JUST IN: Indian MoD approves push to acquire 400,000 *indigenous* Close Quarter Battle Carbines for the Indian Army. The latest in the meandering Indian quest for CQB carbines. via Livefist

 

[SUPERPOWER]

JUST IN: Indian MoD approves push to acquire 400,000 *indigenous* Close Quarter Battle Carbines for the Indian Army. The latest in the meandering Indian quest for CQB carbines. via Livefist

Which Indeginious carbine are they going to procure???

 

[lcafanboy]

 

[Dark Sorrow]

Defence Ministry clears arms procurement cases worth over Rs 28,732 crore for defence forces including armed swarm drones, carbines, and bulletproof jackets.

Are the purchase going to be done from Indian companies or will it be imported.
Recently their was news that carbines will be procured from local manufacturers. What about the others?

 

[Dark Sorrow]

Which Indeginious carbine are they going to procure???

Probably P-72 Recon Carbine

SSS Defence | SMALL_ARMS

Our range of high-tech products include sniper rifles, assault rifles, match grade ammunition & accessories including intelligent day & night rifle scopes.

www.sssdefence.com