Economy

To help improve exports, Defence Ministry in process of formulating OGL for private companies

Our Bureau Chennai | Updated on July 06, 2019 Published on July 06, 2019

Ajay Kumar, Secretary, Department of Defence Production, Ministry of Defence, Govt of India   -  Bijoy Ghosh

If a company has an Open General Licence (OGL), it need not come back to the ministry to seek permission for every transaction

In a bid to improve export of Defence items, the Ministry of Defence is in the process of formulating a procedure for Open General Licence (OGL) system - followed by several western countries - for private companies.

If a company has an OGL, it need not come back to the ministry to seek permission for every transaction, said Ajay Kumar, Secretary, Department of Defence Production.

“We have already drafted the OGL procedure and had extensive consultation with various stakeholders. The Defence Forces and all agencies have supported this proposal. Very shortly, we should be able to introduce the OGL system,” he said in his inaugural address at the CII Conference on Aerospace & Defence Manufacturing Technologies, on Friday.

Export of Defence (restricted) items increased significantly to ₹10,700 crore in 2018-19 as against ₹1,650 crore two years ago. For 2019-20, the target is ₹20,000 crore. “In the first quarter, we have already exceeded ₹5,000 crore and will achieve over ₹20,000 crore for the year. For those items for which no permission is required, value of those exports could be another ₹20,000 crore to ₹25,000 crore,” he said.

On Defence offset, Kumar said as against claims of $2.4 billion received by the Ministry, less than $0.1 billion was discharged till March 2018. However, during last financial year, the offset discharged was $1.4 billion, he said.

Kumar said one of the challenges that plagues the private industry is lack of testing facilities to test Defence items. With most of testing infrastructure being in the public sector, the Defence Ministry has issued instructions they could be made available for private industry also.

The Defence Ministry has approved a scheme under which testing infrastructure for private sector will be set up by providing 75 per cent of project cost with the facility to be set up on PPP through a Special Purpose Vehicle. The remaining 25 per cent of the cost will be be mobilised by the industry. “One of the first projects that we are proposing to set up under this scheme is to test Unmanned Aerial Vehicle [UAV] in a test field area. We are in the process of finalising the specifications. While UAVs imported by Defence forces can be tested in their own air fields, the UAVs developed by the industry struggle to find a suitable place for testing,” he said.

Published on July 06, 2019
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