Indian government in a move to boost defense manufacturing under the ‘Make in India’ initiative today, has extended the initial validity of industrial licenses to seven years from three.
“Eyeing the long gestation period of defense contracts to mature, we do not want the companies requiring licenses to run around government ministries, but rather concentrate on manufacturing. The license could further be extended by another three years, giving a decade’s time for companies to start manufacturing,” the Department of Industrial Policy and Promotion said in a press release.
In defense manufacturers with foreign direct investment, the government allowed more than one Indian company to hold the remaining stake that must be at least 51%. This cleared way for close to 100 proposals, some of which were pending with the government for years.
Earlier, the validity of such license for the defense sector was for three years, and extendable up to seven years.
The government has said it wants to bring India's rank within top 50 in terms of ease of doing business, from 142nd currently, according to the latest World Bank report.
Last year, the government relaxed the foreign direct investment policy in the defense sector to 49 per cent, from the earlier 26 per cent.