faq on industrial licensing
 
 
FAQs ON INDUSTRIAL LICENSING IN DEFENCE SECTOR

Q.1.    Whether Industrial License is required for undertaking manufacturing of defence items ?
A.1    Industrial license is required only for the items listed in defence products list (Press Note 3 of 2014 Series) under the IDR Act, 1951 from defence angle. No IL is required for undertaking manufacturing of the items not listed in the said defence products list.

Q.2     What are the licensable defence items for which industrial license is required ? Whether defence industrial is necessary for the items which have dual use ?
A.2    DIPP vide their Press Note No 3 of 2014 Series dated 26/06/2014 has notified on their website (WWW.dipp.nic[dot]in) a list of items requiring industrial license for  manufacture from defence angle. Defence industrial license is not necessary for the items which have dual use except those items which are mentioned in the said Press Note.

Q.3    Whether an industrial license from defence angle is required for undertaking manufacturing of items such as parts, components, castings, forgings and test equipment etc ?
A.3    Industrial license is not required for undertaking manufacturing of items such as parts, components, castings, forgings, and test equipment etc. Further, an industrial license is only required for manufacturing of the items listed in the defence products list (Press Note 3 of 2014 Series).

Q.4    Where a company can apply for obtaining industrial license for the manufacturing of defence items ?
A.4    A company can apply for grant of industrial license for manufacture of licensable defence items on line through e-biz portal provided at DIPP’s website (WWW.dipp.nic[dot]in).

Q.5    What is the validity of industrial license granted to a company for manufacture of defence items ?
A.5    Vide DIPP’s Press Note 10 (2015 Series) dated 22/09/2015, the initial validity of Industrial license for defence sector has been revised to 15 years, which is further extendable upto 18 years.

Q.6    Which is the administrative  ministry for the grant of extension for defence industrial license ? Where should the company apply for extension of defence industrial license ?
A.6    Ministry of defence,  department of defence production is the administrative ministry for grant of extension of industrial license to the private sector. The Company may send their IL extension application to contract purchase Officer, Department of defence production, ministry of defence, D (DIP) section, Sena Bhawan, New Delhi.

Q.7    What is form G ? Up to what period a defence license company has to submit “ Form G” ?
A.7    As per the licensing conditions, in terms of Rule 19 of the Registration and licensing of industrial undertaking Rules, 1952, the company holding defence Industrial license has to submit the progress reports in “ Form G”/(reproducted I Annexure II) outlining the progress of implementation of license for each half year period ending on 30th June and 31st December. The return should be furnished in duplicate to the addresses mentioned the Industrial license. The return should be furnished  within one month to expiry of the half – yearly period to which it is related. The proforma of Form G may be obtained from DIPP. A defence licensee company has to submit “Form G” until it commences the production activity in respect of items for which defence  industrial license has been issued.

Q.8.    What is “Annexure III”?
A.8    A company holding defence industrial license which has commence production activity in respect of issued defence IL has to submit the intimation of commencement of production activity in “Annexure III”. The proforma of the Annexure III may be obtained from Department of Industrial Policy & Promotion (DIPP)/ Ministry of Defence, D(DIP) section, Sena Bhawan, New Delhi. Further, no extension of an IL is required after intimation of commencement of production i.e. submission of Annexure III.

Q.9    Whether partial commencement of production may be considered for submission of Annexure III ?
A.9    Intimation of partial commencement of production is considered for submission of Annexure III.

Q.10    Whether any security guidelines needs to be followed/adopted after grant of Industrial license for manufacture of licensable defence items ?
A.10    The licensed Defence company in the private sector after obtaining industrial license is required to follow the security architecture provided in the Security Manual for license Defence Industrial available at Department of defence Production’s website (www.ddpmod.nic[dot]in) based on their categorization.


Q.11    Whether  a defence industrial licence is compulsory to become an Indian Offset Partner (IOP) ?
A.11    Possession of defence industrial license  is not a pre-requisite for becoming an IOP. However, It is mandatory only if it is required under licensing requirements/guidelines issued by DIPP. A clarification in this regard is available at MoD’s website (www.mod.gov.in under publications/reports).
Q.12    Whether Industrial license is  required from defence angle for undertaking maintenance, Repair and overhaul (MRO) activities ?
A.12    Maintenance, repair and overhaul (MRO) activities in defence  sector may be treated as services and should not be subjected to the industrial license under IDR Act unless it actually involves manufacturing of any components/sub-assemblies which  are licensable and that the product should remain the property of the same customer after MRO operation.

Q.13    Whether an industrial license is required from defence angle for undertaking upgrades of licensable defence items ?
A.13    Yes, an industrial license is required from defence angle for undertaking upgrade of licensable defence items.