Aerospace and defence
Under Press Note 4 (2020 Series) of the Department for Promotion of Industry and Internal Trade, foreign direct investment in defence manufacture is permitted up to 74 per cent under the automatic route, and above 74 per cent through the government route wherever it is likely to result in access to modern technology or for other reasons to be recorded. The Defence Acquisition Procedure drives indigenisation. Licensing, security clearance and offset obligations govern entry and continuing operation.
Reviewed
What this covers
- DPIIT and Ministry of Defence licensing and FDI approvals
- Defence offset obligation structuring and compliance
- Technology transfer and dual-use export control
- Government defence contract structuring and disputes
- Joint venture and co-development agreements
- DRDO and defence public sector undertaking procurement disputes
- Industrial licensing under the Industries (Development and Regulation) Act, 1951
- Security clearance and continuing regulatory compliance
The notes behind these capabilities
The Defence Procurement Manual 2025 came into force on 1 November 2025 for revenue procurement by the Ministry of Defence and the Services. Liquidated damages for late delivery still run at 0.5 per cent of the price a week, but the ceiling is now 5 per cent, rising to 10 per cent only where the inexcusable delay exceeds one-fourth of the total delivery period. On a development contract for an indigenised item the clause is waived until the prototype is developed, and afterwards, where it is included at all, the rate is 0.1 per cent a week.
Reference
Regulators in this sector
Forums
Practice areas that apply
- Boardroom and corporate
- Transaction advisory
- Capital markets
- Contracts and procurement
- IP and licensing
- Banking, SARFAESI and DRT
- Insolvency
- Civil disputes
- PMLA
- Projects and land
- Employment
- Taxation and fiscal
- White-collar and cyber defence
- Money recovery
- Foreign exchange (FEMA)
- Prevention of sexual harassment (POSH)
- Employee's Compensation
- GST disputes
Advocates in this sector
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