Make in India: Private companies given 56 defence licenses

Prime Minister Narendra Modi’s Make in India project aimed at indigenizing the country’s military-industrial base has taken off quietly, but with concrete results. The government has awarded 56 defence manufacturing permits to private sector entities since it came to power in May last year, according to the data released by the Department of Industrial Policy and Promotion (DIPP).

The government has cleared several applications which had been pending for over four years. This is a strategic move considering the private sector’s ability to undertake defence projects, which, until now, had been run by foreign vendors and state-run entities.

This is the first such step to enable firms like Pipavav, Tata and Mahindra to launch production unit for major defence equipment. Pipavav Defence Engineering Company (PDOC), which is being acquired by Reliance, has been given four permits to manufacture defence items like, medium tanks, howitzers, missiles, sensors and torpedoes. Tata Group will upgrade major fighting tanks like the T 90 and T 72 units of the Indian Army, while Mahindra, has been permitted to manufacture naval systems like torpedoes, boats and sea mines.

In addition, companies like Tech Mahindra and Mahindra Telephonics Integrated Systems have also been given clearances. Some of India’s smaller companies like MKU – a bulletproof equipment manufacturer – have been permitted to manufacture night vision devices.

Since the Modi government came took charge, it has prioritized the opening of India’s defence sector. Earlier, the government had increased the Foreign Direct Investment (FDI) limit to 49 percent, even up to 100 percent in selected cases, in India’s defence sector.

The government is soon expected to introduce a new defence procurement policy, which is expected to clarify complex issues, including the offset policy, blacklisting process and a specific route for the prime minister-led “Make in India” initiative.

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