Tuesday, 29 November, 2022
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Defence ministry may ease licensing rules for private players

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Minister Nirmala Sitharama seeks to know why deemed licences not be given; DRDO asked for tech list for commercialisation.

New Delhi: In what appears to be her first intervention to promote ‘ease of doing business’, defence minister Nirmala Sitharaman has sought to know from senior officials as to why Indian companies should not be given “deemed licences” for production in case of clearance delays from the government.

After a meeting over the weekend with representatives of top companies involved in the ‘Make in India’ initiative, Sitharaman promised to take up a long-pending demand by Indian entities that insist they are at a disadvantage compared with foreign players due to tax concessions given to the latter.

Sitharaman, who in the past two months, has travelled extensively to military establishments across the nation, promised to look into problems faced by Indian companies in obtaining licences for manufacturing due to delays in clearances from ministries such home and telecom.

“If the stipulated time period to respond to an application for licence is exceeded beyond a reasonable time of, say, two months, why should the party not be given a deemed licence? We are looking into it,” a senior defence ministry official said.

The minister has also asked DRDO for a master list of defence technologies it has developed that can be exploited commercially by giving them to the private sector on licence. “There are several technologies developed by DRDO but we need a master list of technologies that are patented but have not been commercialised as yet,” the official added.

On the issues of a level-playing field with foreign companies on taxation issues, the minister has asked officials to study the request by Indian companies that tax exemptions are being given to foreign players. “The private sector has asked for tax parity. This is being studied and if there are any lapses (or gap), this will be rectified,” the official said.

On speedy clearances for ongoing procurement project, defence ministry officials hinted that the three services have been asked to reprioritise the acquisition projects so that only the most critical ones are cleared in the coming days. Officials pointed out that the armed forces have recently been empowered to make critical purchases, giving them greater flexibility on choosing projects to be prioritised.


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