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33 Pending Applications Approved to Boost Manufacturing
Oct 13, 2014

Giving a big boost to Make in India, the Licensing Committee chaired by Secretary, Department of Industrial Policy & Promotion has recently 19 proposals for grant of Industrial License. These included applications for defence production from major Indian players. Many of these proposals were pending in Government for last several years. It has been possible to approve these cases as consequence of the simplification of FDI policy which has raised the FDI cap in defence from 26 percent to 49 percent and permitted portfolio investments upto 24 percent of the total equity of the investee/joint venture company under automatic route and doing away with requirement of 51 percent equity ownership by a single Indian investor/company. 

In case of another additional 14 pending defence applications, applicants were informed that licenses were not required anymore as a vast number of defence items have been delicensed. A Defence Products list for industrial licensing have been issued, wherein large number of parts/components, castings/ forgings etc. have been excluded from preview of industrial licensing. Similarly dual use item, having military as well as civilian application (unless classified as defence items) do not now require Industrial License from defence angle. This has enabled domestic and international companies to undertake manufacturing without going through a lengthy process. The applicant company now only needs to file an Industrial Entrepreneur Memorandum (IEM) for these items and implement his project through the automatic route.

It is expected that clearance of these 33 applications and the deregulation of Defence product List excluding a large number of components from purview of industrial licensing will provide a major impetus to advanced manufacturing in Defence sector. 

The Committee also discussed the possibility of removal of stipulation of annual capacity in the Industrial License as also to permit of sale of licensed items to other entities under the control of MHA, State Governments, PSUs and other valid defence licensed companies without requiring approval of DoDP. It was agreed that the above stipulation would be relaxed subject to submission of bi-annual returns by the unit. The DIPP would be shortly notifying the above decision by issue of a Press Note. 

Government has taken a series of measures to improve the Ease of Doing Business in India. The emphasis has been on simplification and rationalization of the existing rules and introduction of information technology to make governance more efficient, effective, simple and user friendly. The measures include 24x7 availability of online filing of Industrial License and Industrial Entrepreneur Memorandum applications, increasing initial validity period of Industrial License to three years, streamlining the processing of applications for grant of extension of validity of Industrial License, treating partial commencement of production as commencement of production for all the items included in the license.


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