Legal Era Nov 2017 | Page 55

TAKE ON BOARD T he Indian Government’s policies in the last few years have gradually moved in the direction of making the defense manufacturing sector more attractive for private entities. This sector has been traditionally dominated by public sector utilities. In an attempt to simplify the regulations involving defense sector and to project India as an attractive destination for defense manufacturing, a series of policy level changes have been notified: • FDI policy for the defense sector has been reviewed and as per the revised policy, composite foreign investment up to 49% is allowed under the automatic route and beyond 49% with government approval. • The Defense Products List for the purpose of issuing Industrial Licenses (ILs) under the IDR Act has been revised and most of the components, parts, sub-systems, testing equipments, and production equipments have been removed from the List, so as to reduce entry barriers for the industry, particularly the small & medium segment. Vasanth Rajasekaran Partner Phoenix Legal Sukrit Seth Senior Associate Phoenix Legal Saurabh Babulkar Associate Phoenix Legal www . legaleraonline . com | L egal E ra | N ovember 2017 55