Ahlawat & Associates specializes in providing end-to-end solutions to clients in the aerospace and defense industry in India. The sector plays a vital role in national security and technological advancement in the country.
With the advancement of innovation, this sector faces many legal intricacies. Our team of experienced lawyers understands the legal and regulatory framework that governs the aerospace and defence industry in India.
Индия - перспективный рынок для аэрокосмической и оборонной промышленности:
- Government Support
The Government of India is actively promoting the defence sector through the Make in India project, which helps increase local manufacturing. - India’s strategic geopolitical position
Situated in a region with complex security dynamics, it requires a strong defence posture, which encourages continuous investment in development in this sector. - Growing Defense Budget
The country has one of the largest defense budgets in the world. The active buildup of military potential opens up huge opportunities for investment and cooperation in the field of defense technology and production.
- Skilled Workforce
India’s pool of highly skilled engineers and professionals, coupled with low entry costs, is an attractive market for aerospace and defence companies looking to establish or expand their operations. - Rise in Foreign Direct Investment (FDI)
Policy changes in FDI in the defence sector have opened doors for international players, making India a lucrative market for foreign investment and partnership.
Запуск оборонного производства в Индии
Для запуска вам потребуются:
- Понимание нормативно-правовой базы
- Получение необходимых разрешений
- Определение стратегического местоположения
- Создание сетей цепочки поставок
- Передача технологии и знаний
- Соответствие стандартам качества
To begin with, one needs to gain an understanding of India’s Defence Procurement Procedure (DPP), Defence Offset Guidelines and other regulations that are crucial for setting up manufacturing in India.
Further, in order to establish defense production, it will be necessary to obtain permits and industrial licenses from the Ministry of Defense and other bodies, including permits for foreign direct investment.
Once you have an idea of the defence procurement process in India and have the necessary documents, you will need to find the best location for the manufacturing unit. Important factors include proximity to defence corridors, availability of skilled manpower, and access to logistics and infrastructure.
You will need to establish a supply chain among local suppliers and manufacturers, which is important for efficient manufacturing under the Make in India project, and enter into technology transfer agreements with Indian entities to facilitate innovation and meet offset obligations under the DPP.
All manufacturing processes and products must comply with stringent quality standards required by the Indian Defence Forces and international organisations.
Процесс создания аэрокосмической инженерной компании в Индии
- Исследование рынка и технико-экономическая экспертиза
- Получение необходимых лицензий и регистрация
- Расположение и развитие инфраструктуры
- Технологическое партнерство и сотрудничество
- Соответствие стандартам безопасности и качества
Market research will help you assess the demand, competition and regulatory environment for setting up a company in India. You can then proceed to obtain an industrial license from the Department of Industrial Policy and Promotion and register the organization with the relevant authorities, including the Directorate General of Civil Aviation (DGCA).
When choosing a location, consider logistics and availability of skilled labor. Establish partnerships for technology transfer and create joint ventures with existing aerospace firms to integrate into the ecosystem and leverage their expertise and resources.
Ensuring compliance with national and international safety and quality standards is critical for the Indian aerospace industry to obtain certifications and approvals for manufacturing and production.
Прямые иностранные инвестиции (ПИИ) в аэрокосмическую и оборонную промышленность
The Government of India has increased the FDI limit in the defence sector under the automatic route to 74% to attract more foreign investment and increase self-reliance in defence production. FDI above 74% requires government approval.
Recent reforms have simplified and expedited the FDI approval process, creating a conducive environment for foreign investors. It has also proposed to relax the requirements for FDI in defence, which reduces the liabilities of foreign investors, making investment in the Indian defence sector more attractive.
The establishment of two defence corridors in Uttar Pradesh and Tamil Nadu has had a positive impact on foreign investment. It provides infrastructure support to foreign companies in these areas, opening up new opportunities for direct investment.
Moreover, the FDI policy amendments to allow FDI in the space sector for installation and operation of satellites up to 74% under the automatic route and up to 100% under the government route are in the final stages. The new FDI rules for the space sector will soon be
approved by the Department for Promotion of Industry and Internal Trade (DPIIT), which is working closely with IN-SPACe (Indian National Space Assistance Centre), the Ministry of Communications and Information Technology and the Department of Space (DoS).
Банковское дело для иностранных организаций
Review the Reserve Bank of India (RBI) regulations for foreign entities to ensure compliance with financial protocols and foreign exchange management laws. Choose a bank that offers specialized services for foreign entities and Russian clients and ensures ease of transactions and support for defense contracts in India. Determine the most appropriate type of bank account for your business needs, whether it is a current account, a fixed deposit, or a special rupee account for foreign investments.
Prepare and submit the necessary documentation, including company registration details, board resolution on account opening, and KYC information. Once the account is opened, set up the necessary features for successful transactions: online banking, trade finance, and foreign exchange services, so that all services are convenient for customers.
Как A&A может помочь вам в создании аэрокосмического и оборонного производства в Индии
Ahlawat & Associates’ approach is to simplify the legal journey so you can focus on building your business, we bridge the gap between complex legal requirements and your business goals in the aerospace and defense sector.
We have extensive experience in dealing with Indian regulatory requirements and we ensure that your business is compliant with the current legislation. From licensing to defence procurement policy, we are here to guide you every step of the way.
We are familiar with the intricacies of defense licensing and procurement processes, we know how to draft and submit applications, and how to interact with government agencies, simplifying the complex procedures for entering the defense market.
We facilitate joint ventures and strategic alliances, helping to establish partnerships with domestic and international organizations. Our legal counsel ensures that these collaborations are effective and your interests are protected. We advise on intellectual property rights, ensuring the protection of your technologies and inventions, and help in concluding technology transfer agreements that comply with Indian and international laws.
In case of disputes, our team has the tools to resolve conflicts effectively. We strive to resolve disputes peacefully, but if necessary, we are ready to represent your interests in official bodies.
Часто задаваемые вопросы
As per Press Note No. 4 (2020 Batch) dated September 17, 2020, the FDI limit in India’s defence sector is up to 74% under the automatic route. Investments beyond 74% require government approval, especially if it involves access to modern technology.
FDI boosts the defence sector by introducing advanced technologies, enhancing infrastructure capabilities, creating jobs and contributing to overall economic growth through joint ventures and collaborations.
Setting up defence manufacturing in India requires conducting market research, obtaining necessary licenses, ensuring regulatory compliance and getting government approval, which is facilitated by the Make in India initiative.
India’s defence procurement policy, including the Defence Procurement Procedure (DPP), opens up opportunities for foreign manufacturers through direct participation in the Indian defence market, promotion of joint ventures and other benefits.
Yes, defence manufacturers in India may be eligible for various direct and indirect tax incentives, stamp duty exemption on land, electricity tax exemption, capital subsidies and training subsidies for workers, especially when operating in defence corridors (incentives may vary as per the aerospace and defence policies of different states).