Broadening the scope for more private sector participation, the Government on Thursday pruned the list of Defence items whose manufacture needs an industrial licence.
This move will benefit small and medium scale units who can now manufacture micro-chips, castings, forgings, components, generators, laboratory equipment and other items, thereby, bringing down the prices and offering more variety to the armed forces. Till now all these items were in the restricted list and the vendors had to obtain industrial licence.
Announcing this decision, Ministry of Commerce and Industry after due consultations with the Defence Ministry and the Armed Forces said items not included in the list of defence item requiring industrial licence would not require any permit.This list requiring compulsory licensing was implemented in 2002 to encourage private sector involvement in defence production. The industry for long was demanding scaling down of the restricted list to boost production in the small and medium scale units.
While the Government now agreed to prune the list, tanks, warships, fighter aircraft, submarines and ammunition will continue to be in the restricted list.Elaborating upon the significance of this step, officials said the end users including the armed forces and ordnance factories will get items at competitive prices.
Giving an example, they said the engine section of a warship itself needs hundreds of small items like washers, generators, wires and rings and they can only be bought by a listed vendor. With striking off these items from the restricted list, such items built by small units can be directly sourced, they said, adding Indian sector has already achieved world standards as regards sub systems and components.
Production of these items needs high precision and relaxation in norms will encourage trained engineers aspiring to be entrepreneurs to enter defence production without going through maze of rules and regulations, they said.