Defence Industrial Licence

Identify the right licensing route for your defence manufacturing project.

Planning to manufacture defence equipment, military electronics, arms or ammunition in India? Your project may require an industrial licence under the Industries (Development and Regulation) Act, 1951 or a manufacturing licence under the Arms Act, 1959. The requirement depends on the product’s specifications, intended application and proposed activities.

Remind Legal helps businesses assess licensing applicability, identify the appropriate authority, prepare application documents and address regulatory queries.

Unsure Whether Your Defence Product Requires a Licence?

Supplying goods to a defence customer does not automatically make every product licensable. Equally, describing a product as a “component” does not establish an exemption.

An incorrect classification can lead to an application under the wrong law, incomplete disclosures or a manufacturing plan that overlooks necessary approvals.

Before committing to production, establish: -

• Whether your product appears in the applicable notified list.
• Whether the IDR Act or Arms Act route applies.
• Whether DPIIT or the Ministry of Home Affairs is the appropriate authority.
• Which premises, security and operational requirements apply.

Get a Defence Licence Applicability Assessment, share your product description, proposed activity and manufacturing location with Remind Legal.

Quick Facts About Defence Industrial Licensing

DPIIT’s current portal directs all new industrial licence applications to NSWS. Older guidance referring applicants to the G2B portal should be read alongside this migration notice.

What Is a Defence Industrial Licence?

A Defence Industrial Licence is commonly used to describe government permission to manufacture specified defence products. It is not a single approval covering every defence-related business.

The principal routes are: -

Press Note 1 (2019 Series) sets out separate lists for the IDR Act and the Arms Act. Product descriptions and accompanying notes are central to deciding applicability.

Who Needs a Defence Industrial Licence?

Businesses proposing to manufacture listed products should assess licensing before beginning the regulated activity.

Examples of categories requiring examination include: -

• Military aircraft and specified military unmanned aerial systems.
• Warships.
• Specified military electronic equipment.
• Certain military protective equipment and training simulators.
• Listed military imaging and countermeasure equipment.
• Tanks, armoured fighting vehicles, weapons and ammunition.

These are broad examples. The notified descriptions contain technical conditions and exclusions; the category name alone is insufficient.

Practical example: A manufacturer proposing a thermal imaging system specially designed for military use should examine the relevant defence equipment entry. A supplier of ordinary commercial electrical fittings needs a separate assessment of its actual products.

Who Is Eligible and When Does Licensing Apply?

Eligibility must be checked against the relevant licensing route and applicant structure. DPIIT’s FAQs identify Indian companies, proprietorships and partnerships as applicant categories. Arms manufacturing applications require particular attention to the applicable entity requirements. A foreign parent should not assume it can directly obtain an Indian manufacturing licence; an Indian investment structure must be assessed separately.

New units, existing units and proposed expansions involving licensable products can require licensing action. MSMEs are also subject to licensing where their products are covered.

Can a Defence Manufacturing Company Have Foreign Investment?

Foreign investment is possible, subject to the various applicable FDI policy, FEMA requirements and security scrutiny.

The defence framework permits up to 74% FDI through the automatic route for companies seeking new industrial licences, with investment beyond 74% through the government route subject to policy conditions. Existing licensees and companies with earlier government approvals require the separate examination; the new-licence rule should not be applied indiscriminately. Investor origin and beneficial ownership must also be reviewed.

What Legal Requirements Must Be Addressed?

The project assessment should cover: -

• Product classification: Match the proposed products and activities to the applicable entries.
•  Applicant eligibility: Check the legal entity and ownership structure.
•  Premises: Establish lawful possession and permitted industrial use.
• Security scrutiny: Prepare accurate and proper promoter, director and ownership disclosures.
• Defence security requirements: Assess the applicable requirements under the Security Manual for Licensed Defence Industries, 2025.
• Additional approvals: Identify environmental, factory, fire, explosives or other permissions relevant to the facility.

The Department of Defence Production published the 2025 security manual on 3 July 2025. Application preparation should account for this updated framework.

A manufacturing licence does not replace permissions required under other applicable laws.

What Documents Are Required?

The final mandatory checklist depends on the selected approval and current portal requirements. For initial preparation, businesses should organise: -

This is a preparation checklist, not a statement that every document is mandatory in every case.

NSW's guidance requires the land documentation in the applicant company’s name and evidence supporting industrial use. It also identifies the licence as location-specific and links its validity to the premises lease.

What Is the Process to Obtain a Defence Industrial Licence?

1. Assess the Product and Activity
   Review specifications, military application, manufacturing scope and any proof-testing activity. Record the basis for selecting the licensing route.

2. Identify the Authority
   Evaluate whether the application falls within the DPIIT’s remit or MHA’s Arms Act jurisdiction. Use the notified delegation and the product list rather than relying only on a general product label.

3. Prepare the Application
   Check that the product descriptions, premises details, ownership disclosures and various supporting documents are consistent. Correct and verify any discrepancies between the application and its attachments before submission.

4. Submit Through the Appropriate Portal
   Use NSWS for the new DPIIT industrial licence applications. For an MHA-administered licence, follow the various relevant MHA/NDAL-ALIS instructions.

5. Address Scrutiny and Queries
   For the DPIIT route, complete the applications are circulated to the relevant agencies, followed by the Licensing Committee consideration and the applicable approval process. Respond to the requests for information within the stated deadline.

6. Review the Licence Conditions
   After grant, check the authorised products, activities, premises and conditions. Identify any additional permissions required before commercial production.

Get Defence Licence Application Assistance, have your classification, disclosures and supporting records reviewed before filing.

What Are the Government Fees and Professional Charges?

The Arms Act licence fee should be checked against the applicable schedule and authority’s instructions. The ₹2,500 IDR Act application fee is not a universal fee for every defence licensing route.

Remind Legal can define the professional scope after reviewing your project information.

How Long Does Defence Industrial Licensing Take?

There is no assured approval date. DPIIT’s published guidance states that efforts are made to issue a licence within five months after acceptance of an application with complete documents. This is an administrative objective, not a guaranteed deadline.

The actual duration depends on classification, document completeness, agency comments, security scrutiny and responses to queries. Project schedules should allow for these dependencies.

What Is the Validity and Is Renewal Required?

IDR Act Route

The framework provides an initial 15-year period for commencing commercial production, with a possible three-year extension subject to the various applicable conditions. An extension is not automatic and it should be sought before the relevant expiry.

Where production has not commenced even within the permitted extended period, the licence is treated as lapsed. These commencement provisions should not be presented as a routine requirement to renew every operating defence licence after 15 years.

Arms Act Route

Published guidance describes and represents the manufacturing/proof-testing licences as having no such fixed validity period, subject to conditions. Facility establishment and various related requirements must ordinarily be fulfilled within seven years; a further three-year extension may be considered on the written representation under the applicable rules.

The issued licence and applicable rules should always be reviewed together.

What Exceptions and Special Cases Require Separate Review?

Parts and Accessories

Press Note 2 (2019 Series) clarifies that parts and accessories do not require an industrial/arms licence unless specifically listed in the annexures to Press Note 1 (2019). This clarification does not apply to MHA’s licensing of small arms.

Dual-Use Products

A product’s civilian use does not settle its licensing position. Assess or evaluate the design, specifications, military configuration and the relevant exclusions.

SEZ and EOU Projects

Special Economic Zone and Export Oriented Unit projects require route-specific examination. Do not assume the ordinary filing procedure applies unchanged.

Repair, Servicing and Proof Testing

Distinguish maintenance and repair from manufacturing, conversion and proof testing. These activities should not be grouped under a blanket exemption.

Defence Exports

A manufacturing licence does not authorise the every export. SCOMET classification, destination, end use and the competent export authority must be assessed separately. DDP administers export authorisations for covered Category 6 munitions-list items.

What Compliance Continues After Approval?

Maintain a compliance calendar covering: -

• Licence conditions and various permitted activities.
• Applicable security obligations.
• Implementation and the commencement milestones.
• Required reports and returns.
• Changes to products, premises, management or ownership.
• Applicable sale, transfer and export controls.
• Continuing facility approvals.

Under the IDR Act route, DPIIT identifies six-monthly Form G progress reporting before commercial production, followed by commencement notification and six-monthly returns. Under the Arms Act route, prior permission for commercial production must be obtained from MHA as required by the applicable process.

What Common Mistakes Should Applicants Avoid?

• Selecting the licensing route before reviewing technical specifications.
• Assuming every defence component is exempt.
• Using the inconsistent product names across documents.
• Treating the MSME or startup status as a licensing exemption.
• Filing with unresolved premises or ownership information.
• Using the outdated portal instructions.
• Missing clarification or the implementation deadlines.
• Assuming the licence grant also provides export permission or tender eligibility.

A clear application connects what you will manufacture, where you will manufacture it and who owns and controls the applicant.

Why Choose Remind Legal for Defence Licensing Assistance?

Remind Legal helps organise the legal and documentation work around your manufacturing proposal.

Our assistance can cover: -

• Product-based applicability assessment.
• Identification of the licensing route.
• Document gap review and application preparation.
• Ownership and foreign investment compliance assessment.
• Assistance with the regulatory queries.
• Review of licence conditions and continuing obligations.

The engagement scope is agreed after reviewing the project. Government authorities retain responsibility for scrutiny and licensing decisions.

What Do We Need from You?

To begin, share: -

• Applicant name and legal structure.
• Product descriptions and available technical specifications.
• Proposed manufacturing, assembly, repair or proof-testing activities.
• Facility location and premises status.
• Shareholding and foreign investment details.
• Existing licences, applications or regulatory correspondence.
• Intended domestic sales and export plans.

Planning to manufacture defence products in India? Talk to Remind Legal for guidance on licensing requirements and application assistance.

Legal & Compliance Disclaimer

This page provides general information on defence industrial licensing in India and does not constitute a legal opinion on a particular product or project. Applicability depends on technical specifications, proposed activities, ownership, location and the prevailing legal framework. Obtain project-specific professional advice before manufacturing or undertaking regulated activities. Approval remains subject to the competent authority’s assessment.