Arms Rules eased to woo investments

The Union Home Ministry has liberalised the Arms Rules to encourage investments in the manufacture of arms, ammunition and weapons systems, to give a boost to the Centre’s ‘Make in India’ policy.

The liberalised rules will promote employment generation in this field, according to an official statement released by the MHA. An official said the rules were liberalised with the aim of making India a regional leader in supplying small arms to neighbouring countries as well as help it become an export hub.

Under the new rules, the licence granted for manufacturing will be valid for the life-time of the licensee company. The requirement of renewal every five years has been done away with.

Similarly, the condition that small arms and light weapons produced by a manufacturer should be sold to the Central government or the State governments with the prior approval of the Home Ministry has also been dispensed with.

The liberalised rules will apply to licences granted by the Home Ministry for small arms and ammunition, and those granted by the Department of Industrial Policy and Promotion (DIPP)for other defence equipment.

Foreign direct investment of a mere Rs 1.1 crore in the defence sector over the last two years had prompted the government to swing into action and prod ministries such as defence and home to quickly address concerns flagged by private sector manufacturers in last July.

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