DPIIT, Commerce Department to Issue Defence Industrial Licences

On 14 November 2026, the Ministry of Commerce and Industry confirmed that the Department for Promotion of Industry and Internal Trade (DPIIT) and the Department of Commerce (DoC) are competent authorities to issue industrial licences for defence purposes under the Industries (Development and Regulation) Act, 1951.

Allocation of licensing authority

DPIIT issues licences to defence manufacturers located outside Special Economic Zones (SEZs). The Department of Commerce issues licences to manufacturers within SEZs and to Export Oriented Units (EOUs). A licence is mandatory for manufacturing specified defence equipment that falls under compulsory licensing.

The clarification reiterates the authority of the two departments to issue these licences.

Important Facts for Exams

• Trade licensing remit: The Department of Commerce’s Directorate General of Foreign Trade administers foreign-trade policy and import-export licensing.
• IDR Act licensing provision: Section 11 of the Act requires a licence to establish a new industrial undertaking in a scheduled industry, subject to statutory exemptions.
• SEZ unit approvals: The SEZ Act, 2005 gives unit-approval functions to each zone’s Approval Committee, separate from the Board of Approval’s role in approving SEZs.
• EOU foreign-exchange test: The EOU scheme measures positive net foreign exchange performance over a five-year block, rather than treating each year as a separate test.