)
Some of the large scale defence deals that were given a go-ahead by DIPP, the nodal agency for FDI, were by Reliance Aerospace, Bharat Forge, Mahindra Telephonic Integrated Systems Ltd, Punj Lloyd Industries, Mahindra Aero Structure Pvt Ltd and Tata Advanced Materials Ltd among others.
The decision was taken during a meeting of the Licensing Committee under the chairmanship of DIPP secretary Amitabh Kant.
"Many of these proposals were pending in Government for last several years. It has been possible to approve these cases as consequence of the simplification of FDI policy vide Press Note 7 which has raised the FDI cap in defence from 26% to 49% and permitted portfolio investments upto 24% of the total equity of the investee / joint venture company under automatic route and doing away with requirement of 51% equity ownership by a single Indian investor/company," said a released issued by the ministry of commerce and industry here today.
The statement also said that this was done keeping in mind Prime Minister Narendra Modi's latest initiative of 'Make in India' to boost domestic manufacturing.
Out the 33 pending defence applications, 14 proposals got delayed due to licensing issues. However, the applicants have now been informed that the licenses are not required anymore as a large number of defence items have been delicensed by the government recently.
A large number of defence components, parts, castings and forgings have now been removed from the industrial licensing list. Similarly in the case of dual use items or those products that have both military as well as civil usage do not require industrial license anymore.
As per the change norm, the applicant company now only needs to file an Industrial Entrepreneur Memorandum (IEM) for these items and implement his project through the automatic route.
"The Committee also discussed the possibility of removal of stipulation of annual capacity in the Industrial License as also to permit of sale of licensed items to other entities under the control of MHA, State Governments, PSUs and other valid defence licensed companies without requiring approval of DoDP. It was agreed that the above stipulation would be relaxed subject to submission of bi-annual returns by the unit," the release added.
The DIPP is expected to shortly notify the decision.
