FAQs on Industrial Licensing in Defence Sector

A.1 Industrial licence 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.
A.2 DIPP vide their Press Note 3 of 2014 Series dated 26/06/2014 has notified on their website (www.dipp.nic.in) a list of items requiring Industrial Licence 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.
A.3 Industrial licence is not required for undertaking manufacturing of items such as parts, components, castings, forgings and test equipments etc. Further, an industrial licence is only required for manufacturing of the items listed in the defence products list (Press Note 3 of 2014 Series).
A.4 A company can apply for grant of Industrial Licence for manufacture of licensable defence items on-line through e-biz portal provided at DIPP’s website (www.dipp.nic.in).
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.
A.6 Ministry of Defence, Department of Defence Production is the Administrative Ministry for grant of extension of Industrial licence 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
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 licence has to submit the progress reports in “Form- G”/(reproduced in 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 of 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.
A.8 A company holding defence industrial license which has commenced 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.
A.9 Intimation of partial commencement of production is considered for submission of Annexure-III.
A.10 The Licensed Defence Company in the private sector after obtaining industrial licence is required to follow the security architecture provided in the Security Manual for Licensed Defence Industries available at Department of Defence Production’s website (www.ddpmod.nic.in) based on their categorisation.
A.11 Possession of defence industrial licence 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).
A.12 Maintenance, Repair and Overhaul (MRO) activities in defence sector may be treated as services and should not be subjected to the industrial licence 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.
A.13 Yes, an industrial licence is required from defence angle for undertaking upgrade of licensable defence items.