Article Posted on : - Oct 31, 2017

NEW DELHI (PTI): The Government is considering introduction of a time-bound mechanism for granting security clearances for setting up of defence industries, in a significant move to promote domestic manufacturing of military platforms and equipment.

The Defence Ministry is examining the reform initiative in consultation with the Home Ministry which issues licenses to defence manufacturers, Defence Ministry sources said.

"In case of delay in security clearance from Home Ministry, we are thinking of making a provision under which after a certain time gap, the license will be 'deemed to be approved'," a source said.

A number of leading industry captains had recently conveyed to Defence Minister Nirmala Sitharaman their disappointment over delays in grant of licence for setting up of manufacturing facilities for military equipment and platforms.

The sources said the Government was looking at putting in place a system under which a time limit will be stipulated for granting of licence on short, medium and long-term basis.

If a licence is not granted within the prescribed time-frame and there is no communication from the concerned agency on it, then the applicant can consider it to be approved, they said while elaborating on the broad contours of the proposal.

India is a leading importer of arms and military platforms globally and the NDA government has listed indigenisation of defence manufacturing as a priority area.

However, nothing significant has happened, primarily due to the regulatory hurdles.

Sources also said Government was examining giving tax benefits to domestic defence industry on the lines of relief being provided to the foreign equipment makers.

The Government gives a tax concession to original equipment makers but those manufacturing the same product in India do not get the benefit.

In May, the Government had unveiled an ambitious policy under which select private firms will be roped in to build military platforms such as submarines and fighter jets in India in partnership with foreign entities.

A wide range of issues, including matters relating to licencing, taxes and duties and ways to speed up the procurement processes were discussed at a meeting Sitharaman had with defence manufacturers last week.

The Defence Ministry is also making a list of technical know-how the Defence Research and Development Organisation (DRDO) has shared with the private defence industry.

"We have asked the DRDO to prepare a list of defence technologies it has developed and has shared with private industry," the source said.

"We have also asked the DRDO to prepare a list of technologies which have not been given to the government or private sector," the source added.