Industry body CII has welcomed the government's move to streamline the industrial licensing process for defence equipment, saying it would bring more clarity to the procedures and encourage new entrants into the sector.

Stating that the Indian defence industry is already at the bottom of the value chain and there is very less incentive for anyone to set up a defence equipment manufacturing unit in India, CII stressed on the need to maintain a fair balance between addressing genuine security concerns and promoting the sector.

"Given the opportunity, the defence industry has the potential to generate large employment opportunities and provide much-needed impetus to India's manufacturing sector leading to its professed goal of self-reliance," said Baba N Kalyani, Chairman of CII National Committee on Defence.

"We are also hopeful that the delays in granting and renewing industrial licensing would also be addressed at the earliest," he added.

Streamlining the industrial licensing process for defence equipment, the government today said permits won't be needed to manufacture items other than those used in the battleground.

Industrial licences would be required only to make items such as tanks and other armoured fighting vehicles; defence aircraft, space aircraft and parts; warships of all kinds; and arms and ammunition and allied items of defence equipment, parts and accessories.

Defence items are covered under compulsory licensing under the Industries (Development and Regulation) Act, 1951.

PTI