Make in India: Govt relaxes Arms Rules to spur investment in manufacturing

To boost the 'Make in India' initiative, the Union home ministry has liberalised the Arms Rules to encourage investment in the manufacturing of arms, ammunition and weapon systems in the country.

The liberalised rules will promote employment generation in the field of manufacturing of arms and ammunition, according to an official statement here today.

Under the new rules, the licence granted for manufacturing will be valid for the life-time of the licensee company.

The requirement of renewal of the licence 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 been done away 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), under powers delegated to it, for tanks and other armoured fighting vehicles, defence aircraft, space crafts, warships of all kinds, arms and ammunition and allied items of defence equipment other than small arms.

The new rules, which came into effect on October 27, are expected to encourage the manufacturing activity and facilitate 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.