Industrial License (IL) - DPIIT G2B Portal

As part of the efforts to ensure ease of doing business, the Department for Promotion of Industry and Internal Trade (DPIIT) has introduced an enhanced DPIIT G2B Portal. The DPIIT vide its notification has announced that the entrepreneur can now apply for Industrial License under IDR Act 1951 and Industrial License under Arms Act 1959 online through the DPIIT’s enhanced portal. The industries that may impact public health, safety, and national security are required to obtain an industrial license in India. The current article explains the procedure to obtain Industrial License through DPIIT G2B Portal.

Gist of Notification

This enhanced portal offers online filing of applications for Industrial License under IDR Act 1951 and Industrial License under Arms Act 1959. Henceforth, no application for Industrial license and Amendment can be filed physically.

All applications for IL will be processed in paperless mode and the license with QR Code will be issued electronically. The license issued may be verified online with the assigned QR code.
The entrepreneur will also be notified through email and SMS instantaneously upon approval of the Application.

Industrial License under IDR Act 1951

In India, there are some regulations and restrictions for establishing industries in certain categories. This is done by making it essential to get an Industrial License before setting up such an industry. Industrial licenses are issued under the Industrial Development and Regulation Act (IDRA), 1951 and are approved by the Secretarial of Industrial Assistance (SIA) on the recommendation of the industrial licensing committee. The provisions of the IDRA Act explain that the industries need to obtain a new license for manufacturing the new products. Industries that require industrial licensing for manufacturing in India include:

Industries under compulsory licensing,
Industrial undertakings attracting locational restrictions

Note: The licensing provision also applies to the expansion of the existing industrial units

Industries subject to compulsory licensing in India

Businesses planning to establish industries to produce any of the following items in India must obtain a compulsory license:

Distillation and brewing of alcoholic drinks
Electronics and aerospace and defence equipment
Cigars, cigarettes of tobacco and manufactured tobacco substitutes
Industrial explosives including detonating fuses, safety fuses, gun powder, nitrocellulose and matches

Hazardous chemicals including products hazardous to human safety and health
- hydrocyanic acid and its derivatives
- Phosgene and its derivatives
- Isocyanates and diisocyanates of hydrocarbon not elsewhere specified (example methyl Isocyanate

These industries are under compulsory licensing mainly because of environmental, safety, and strategic considerations. Compulsory licensing is regulated by the Ministry of Industrial Development.

Locational restrictions for industries in India

Under this provision of IDRA act, industries located within 25 kilometres of the periphery of cities having a population of at least one million, must obtain an industrial license from the DPIIT. This locational restriction does not apply in the following cases:

Industries classified as a ‘non-polluting industry’
Industries located in an area designated as an ‘industrial area’ before July 25, 1991.

The location of industrial units is subject to appropriate local zoning, land use regulations, as well as environmental regulations to maintain ecological discipline.

De-licensed industries in India

There is no exhaustive list of de-licensed industries specified by the Department for Promotion of Industry and Internal Trade (DPIIT). However, industries exempted from the provisions of the industrial license must file an Industrial Entrepreneur’s Memorandum (IEM) with the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry.

Industrial License under Arms Act 1959

Items for which DPIIT has been delegated the powers of Licensing Authority under Arms Act 1959 and Manufacturing License Applications are to be submitted in Form A6 are as follows:

Tanks and other armoured fighting vehicles
Defence aircraft, spacecraft, and parts
Warships of all kinds
Arms and ammunition and allied items of defence equipment; parts and accessories thereof, other than a small arm of calibre up to 12.7 mm and parts, components, and ammunition for such small arms.

The validity of Industrial License

The initial validity of an Industrial License will be for three years. The trader has to submit a progress report (form ‘G’) on six monthly bases, until the commencement of commercial production. Note: Form ‘G’ is provided with the Industrial License

If the entrepreneur commences commercial production within the validity period, there is no need for applying for an extension of validity.
In case, the industry owner fails to commence commercial production within the initial validity period, they may directly apply to the concerned Administrative Ministry for extension of validly of the Industrial License (IL), as the extension of validity of IL is processed by the concerned Administrative Ministry.
The owner can apply twice, for extension of validity of IL for two years each.
The total period of validity of the Industrial license (IL) is seven years, within which the commercial production has to commence.
In case the commercial production is not commenced within this period the license would be rendered invalid

Documents Required for Industrial License

The following documents need to be uploaded for obtaining the Industrial License:

Ownership Proofs
Certificate of Incorporation
Memorandum of Association/Article of Association
Board resolution certificate
The undertaking of the country of concern
FDI
Other relevant documents
Briefly indicate process involved in the manufacture of items
Details of company cases if any against the company /Director’
Government approval for automatic route

Application Procedure

To apply for the industrial license application, access DPIIT’s G2B portal, click on the Registration button from the home page.

Industrial License (IL) - DPIIT Home Page In the user registration form, provide all the necessary information and click and continue button. The link will move to the next page, where the applicant needs furnish the details of the user name and password.

Industrial License (IL) - DPIIT User Registration By accepting the terms and conditions, an OTP will be sent to the registered mobile number and email ID. On furnishing, the G2B user ID will be generated. After successful registration, an entrepreneur can log in to the portal using User Name and Password.

Industrial License (IL) - DPIIT User Login

Industrial license

To apply for the industrial license process, click on Industrial License Two parts that are IL - Under IDR Act 1951 and IL- under Arms Act 1959 will display.

Industrial License - Under IDR Act 1951

The first entrepreneur needs to fill details related to the IDR Act 1951 of Industrial License:

Details of the Industrial undertaking
Existing Activities of the Company
Information regarding foreign investment involved
Details in respect of Companies/Firm (Indian/Foreign)
Investment

Once the details are furnished correctly, the applicant needs to upload the necessary documents to proceed further with the Industrial License application. On successful submission of documents, the entrepreneur needs to make the payment towards the application fee. After submitting the form, the “Payment” option will display and the entrepreneur needs to click on the Pay now option. Provide the card details to process the payment. Get Industrial License All the applications filed through the DPIIT’s G2B portal will be scrutinized in the 'industrial license Section' for verification related to 'Incorporation Certificate'; 'Memorandum of Article (MOA)'; 'Article of Association (AOA)' and 'Codes related to NIC and Administrative Ministry/Department etc. Once verification is over and found correct; the Department issues Industrial License through G2B portal and physical copy Industrial License will be sent through the post.

Industrial License - Under Arms Act 1959

After login to the portal, click on Under Arms Act 1959 IL to proceed further and fill the following details:

Name of the applicant
Registered Office Address
Email ID
Responsible Person Name
Description of the firearms to be manufactured /Proof tested
Proposed annual capacity

Once the information is filled successfully, upload the necessary documents to submit the form, click on the Final Submit button. The application filed through the DPIIT’s G2B portal will be scrutinized in the 'Industrial License Section' for verification. If the applications for grant of license are complete in all respect with necessary documents, DPIIT forward the location to concerned administrative ministries, Ministry of Home Affairs, Concerned State Government, and other concerned agencies for their comments. After receipts of Comments from the concerned Ministries, files are processed and furnished to the Licensing Committee for consideration. Licensing committee will recommend for grant of license of the proposal based on the comments received and deliberations in the Committee. After a recommendation, the approval of the Minister in charge of DPIIT will issue the Industrial license.