Defence manufacturing rules eased

Defence manufacturing rules eased

News:

Licensing process to be simplified for private industry to build a range of defence and aerospace equipment.

Important Facts:

• It is to be done by bringing them under the licensing authority of the Department of Industrial Policy and Promotion (DIPP).
• Items are listed in three categories — defence aircraft, warships of all kinds, and allied items of defence equipment.
• The most significant aspect is that warships of all kinds, surface and sub-surface, have been included in the listing
• The industrial licensing has been terminated for ‘parts and components of the equipment’ which would benefit the small and medium enterprises (SMEs).
• New notification, supersedes DIPP’s earlier press note of June 2014 segregates defence items in two categories covered by two different Acts — the Industries (Development and Regulation) Act, 1951, and the Arms Act, 1959.

Significance:

• Move is expected to help foreign Original Equipment Manufacturers (OEM) looking for partnerships with the private sector.
• The Defence Ministry has also formulated an ambitious Strategic Partnership (SP) model under the Defence Procurement Procedure (DPP), covering four specific areas to promote role of private sector in defence manufacturing.