L&T MBDA Missile Systems Ltd, a joint venture between L&T and France’s missile systems manufacturer MBDA, has received in-principle approval from the government for its proposed unit for assembly of missile weapon systems at the Aspen Infrastructure Ltd Special Economic Zone (SEZ) in Coimbatore. This will allow the company to carry out some preparatory work while waiting for its industrial licence.

The Board of Approval for SEZs, in its recent meeting, also gave its approval to a proposal by Tata Power Company Ltd’s SEZ unit under Cochin SEZ (CSEZ) seeking grant of industrial licence for manufacture of defence aircraft for military application, as per minutes of the meeting.

The in-principle approval to L&T MBDA was given after the company submitted that a provisional approval would help it start construction of its manufacturing facilities while awaiting its industrial licence from the Department for Promotion of Industrial and Internal Trade (DPIIT).

“The Board, after deliberations, decided to grant in-principle approval to the proposal subject to all necessary approvals. Development Commissioner, MEPZ, should ensure necessary compliance,” the minutes said.

L&T MBDA Missile Systems, incorporated in 2017 with L&T holding 51 per cent stake and MBDA the remaining 49 per cent, had indicated in its submission that it had already started receiving orders with critical delivery timelines and needed to proceed with the preliminaries such as signing of leases and construction of manufacturing facilities.

The company, however, assured that manufacturing operations will not commence until the grant of industrial licence under the Arms Act, 1959, by the DPIIT.

Tata Power Company Ltd, in its submission, pointed out that while most production activities to take place in its SEZ unit under CSEZ had received the approval of the BoA in a meeting last year, the proposal to manufacture defence aircraft for military application was left out as it fell under the purview of the Arms Act and the DPIIT was to issue an industrial licence for it. However, subsequently, the category got removed from the Arms Act and, therefore, does not require an industrial licence from DPIIT.