Defence : Norms for the manufacturing of defence items relaxed

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  • The government has relaxed norms for the manufacturing of the defence items.
  • As per new norms, manufacturing of items of defence aerospace and warships will now be covered by Industries (Development and Regulation) Act and will not require any licence from the Commerce and Industry Ministry.
  • The Department of Industrial Policy and Promotion (DIPP), under the Ministry of Commerce and Industry, has issued a clarification on the list of defence products requiring a compulsory licence under Industries (Development & Regulation) Act, 1951 (IDRA), and Arms Act, 1959.
  • The new norms together with enhancing the ease of doing business will aid in attracting investments and fasten the process of indigenisation of defence production.

Defence : Strategic Partnership Guidelines

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Strategic Partnership Guidelines
  • SP model aims to revitalise defence industrial ecosystem and progressively build indigenous capabilities in private sector to design, develop and manufacture complex weapon system for future needs of armed forces.
  • It lay emphasis on incentivisation of transfer of niche technology and higher indigenous content.
  • The SP model has four segments — submarines, single engine fighter aircraft, helicopters and armoured carriers/main battle tanks  which will be specifically opened up for the private sector.
  • Under this model, one Indian private company will be selected in each segment which will tie-up with shortlisted global equipment manufacturers to manufacture platforms in India through technology transfer under Make in India.
  • All procurements under the SP model would be executed by specially constituted Empowered Project Committees to “provide focussed attention and ensure timely execution.”
 
Significance
  • It is considered as major step towards boosting private sector participation in domestic defence manufacturing.
  • The policy had come into effect in May 2017 but progress was delayed due to lack of specific guidelines.
  • These guidelines lay emphasis on incentivisation of transfer of niche technology and higher indigenous content from global majors, who in collaboration with Indian partners are ready to make India regional and global defence manufacturing hub.
  • It will give major fillip towards encouraging self-reliance and aligning defence sector with the ‘Make in India ‘ initiative.
 
NOTE : Mention SPG in answer related to Make in India, Defence Indigenisation etc.

Strategic Trade Authorization-1 (STA-1)

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Context:
  • United States has designated India as Strategic Trade Authorization-1 (STA-1) country that will allow country to buy highly advanced and cutting-edge sensitive technologies from America.
  • This coveted status brings India in par with US’s closest allies and partners such as NATO.
 
What is STA-1?
  • STA-1 designation authorizes export, re-export and transfer (in-country) of specified items on Commerce Control List to destinations posing a low risk of unauthorised or impermissible uses.
  • Currently there are 36 countries on STA-1 list.
  • India is only South Asian country to be on the list. Other Asian countries designated as STA-1 are Japan and South Korea.
 
What are the benefits of having STA-1 designation to India?
  • Under STA-1, India and US have reached understanding under which India will receive license-free access to wide range of dual-use technologies in conjunction with steps that India has committed to take to advance its export control objectives.
  • STA-1 treatment will expand scope of technology exports subject to Export Administration Regulations (EAR) that can be made to India without individual licenses.
  • It will further enhance bilateral defence trade relationship and result in a greater volume of US exports to India.
  • It will allow US companies to more efficiently export much wider range of products to Indian high technology and military customers.
  • It will benefit US manufacturers while continuing to protect its national security.
  • It will provide India greater supply chain efficiency, both for defence and for other high-tech products that will increase activity with US systems, interoperability of systems and will reduce time and resources needed to get licensing approved.
  • It will be also competitive advantage for US, in terms of supplying those kinds of products to India.
  • This new designation reflects India’s membership in three of four multilateral export control regimes.

 

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