"The licencee shall be allowed to sell defence items to government entities under the control of Ministry of Home Affairs, state governments, PSUs and other valid defence licensed companies without prior approval of the Department of Defence Production," a Commerce and Industry Ministry statement said.
However, it said, for sale of the items to any other entity, the licencee shall take prior permission from the Department of Defence Production (DoDp).
The government has also decided to deregulate the annual capacity for production of defence items by industrial licencees with the condition that licencees shall submit half yearly production returns to the Department of Industrial Policy and Promotion and DoDP.
The steps would help India in improving its ranking the ease of doing business and attract investments in the defence sector.
According to a World Bank report, India has slipped three positions to 134th spot in the latest 'ease of doing business' list, which is topped by Singapore.
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