§1Who it is for

  • Any firm planning to manufacture defence items in India

Useful if

Anyone mapping whether their product needs a licence before investing

Do not spend time on it if

Pure component makers whose items are not on the Annexure lists

§2Eligibility

  1. Industrial licence under IDR Act 1951 needed only for items in Annexure I of DPIIT Press Note 1 (2019 Series) — e.g. defence aircraft, warships, tanks/ground vehicles, missiles, certain defence electronics (law-firm summary)
  2. Arms Act licence for arms and ammunition: DPIIT handles items in Annexure II of Press Note 1 (2019); small arms and ammunition outside it stay with MHA (law-firm summary)
  3. Parts, components and accessories need no industrial or arms licence unless expressly listed in Annexure I/II (law-firm summary)
  4. FDI up to 74% under automatic route for companies seeking new industrial licences; above 74% with Government approval where it brings modern technology or other recorded reasons
  5. Companies not seeking a licence / already approved: fresh foreign investment up to 49% needs a declaration to MoD within 30 days of shareholding change; beyond 49% needs Government approval
  6. Note: DAP 2020 Make-I/Make-II/Buy (Indian-IDDM) eligibility requires FDI not above 49% — so a 74% FDI firm can manufacture but may not qualify for these procurement categories

§3Benefits

Not published

The guideline does not list the benefits. Ask the portal or bank before you apply — we do not make up lists.

§4Norms — pattern of assistance

  1. Licence applications considered by DPIIT in consultation with MoD and MEA
  2. Foreign investment subject to MHA security clearance and MoD guidelines; Government may review any foreign investment on national-security grounds
  3. Investee company must be self-sufficient in product design and development and have maintenance & life-cycle support in India
  4. IDR industrial licence valid 15 years from issue (production must start within it), extendable by 3 years (law-firm summary)
  5. Arms Act manufacturing licence granted without expiry but facility and production must start within 7 years (law-firm summary)
  6. Licensed units must follow the Security Manual for Licensed Defence Industries (SMLDI) 2025 issued by DDP (law-firm summary)

§5Documents

Not published

The guideline does not list the documents. Ask the portal or bank before you apply — we do not make up lists.

§6How to apply

  1. 1

    Apply for industrial licence online through the National Single Window System (NSWS); amendments also via NSWS (law-firm summary)

§7Pros and cons

Merits

  • Most parts and components need no licence at all — a small supplier can start without one (law-firm summary of Press Note 1 (2019))
  • Long licence validity (15 years) — law-firm summary

Demerits

  • MHA security clearance for foreign investment and SMLDI security compliance add time and cost — Press Note 4 (2020) / law-firm FAQ
  • Firms above 49% FDI are shut out of Make-I, Make-II and Buy (Indian-IDDM) — DAP 2020 Para 20

→Related schemes

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Eligibility check, DPR and application file — ask us on WhatsApp.

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Our interestHelp is our paid service. You can also apply for the scheme yourself.

Sources

  1. DPIIT Press Note No. 4 (2020 Series) — FDI in Defence
  2. Acuity Law — Amended Defence FAQs (17 Jun 2026, Japanese edition)
  3. Defence Acquisition Procedure 2020 (as amended, Nov 2021) — full text, DDP

Checked on 18 October 2026. For information only — confirm with the department or bank. Spotted a mistake? Report it.