Govt relaxes Arms Rules to boost investment in manufacturing

The government has liberalised the arms manufacturing policy with the aim to boost its ‘Make in India’ initiative, doing away with renewal of licence every five years, allowing increase in capacity up to 15 per cent without its prior permission and introducing a one-time licence fee.

The new Arms Rules, which came into effect last week, also give a blanket permission for manufacturers to supply arms to state or central government without seeking prior approval from the Union Home Ministry, an official statement said here today.

The move, which is aimed at encouraging investment in the manufacturing of arms, ammunition and weapon systems in the country, is also expected to generate more employment in this field, it said.

Under the new rules, licence granted to a manufacturer will be valid for life-time and does not need to be renewed every five years, as was the practice earlier, it said.

The new rules will apply to those who have been granted licences by the Union home ministry for manufacturing small arms and ammunition.

It will also be applicable to those manufacturers who have been granted permission by the Department of Industrial Policy and Promotion (DIPP) for tanks and other armoured fighting vehicles, defence aircraft, space crafts, warships of all kinds, arms and ammunition and allied items of defence equipment, it said.

The new rules, which came into effect on October 27, are expected to encourage the manufacturing activity and facilitate the availability of world-class weapons to meet the requirement of armed forces and police forces in sync with the country’s defence indigenisation programme.

Under the new rules, enhancement of capacity up to 15 per cent of the quantity approved under the licence will not require any further approval by the government. The manufacturer will be required to give only prior intimation to the authority, the statement said.

The licence fee has been reduced significantly. Earlier the licence fee was Rs 500 per firearm which added up to very large sums and was a deterrent to seeking manufacturing licenses. The licence fee will now range from Rs 5,000 to the maximum of Rs 50,000.

The fee for manufacturing licence will be payable at the time of the grant of license rather than at the time of application.

Single manufacturing licence will be allowed for a multi-unit facility within the same state or in different states within the country, the statement said.