Apex industry body ASSOCHAM today hailed the recent government notification on manufacturing items of defence aerospace and warships to be covered by Industries (Development & Regulation) Act terming it a step in the right direction.
“The move would end licensing for defence manufacturing and give a fillip to Government’s Make in India campaign,” said The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“With the list of defence items requiring industrial license being pruned down by removing the requirement of licensing for ‘parts and components of the equipment,’ this would accrue benefits towards Tier-I/Tier-II vendors giving a boost to the small and medium enterprises (SMEs),” it added.
Further, list has been segregated for requiring license under the two acts – Industries (Development and Regulation) Act, 1951 and Arms Act, 1959, clearing the ambiguities over license policy.
“The industry would now expect the Department of Industrial Policy and Promotion (DIPP) to notify standard operating procedures along with timelines for processing the license applications,” further said ASSOCHAM.
Apart from domestic companies, the government’s move would also help foreign players trying to establish manufacturing set-ups in India and promote ease of doing business.
The apex chamber further said that for private sector, co-development and co-manufacturing along with foreign original equipment manufacturers (OEMs) and Defence Public Sector Undertakings (DPSUs) is necessary in order to turn India into a high value aerospace and defence manufacturing destination not just for the local market but also for export.
Besides, these factors need to be clubbed with creation of strong supply chain which is critical for a defence manufacturer looking to optimize costs and timelines. “Government needs to create adequate demand for private sector for final product to make the industry viable.