Applicable Laws & Legal Compliances for Defence Tech Start-ups: Lawyers Advice | DefenceTech Lawyer in Delhi NCR | DefenceTech Company Lawyer in Delhi NCR | Technology Lawyer in Delhi NCR
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India has a powerful defence industrial base and with the boom in the technology sector. It has strengthened the military sector on a very large scale. The defence industry merged with nation’s upgraded technology is commonly referred to as Def-tech Industry.
Methods undertaken by the Government:
The Defence Procurement Procedure 2016 brought in some changes and introduced the category of “Buy Indian Indigenously Designed, Developed and Manufactured (IDDM)”. The government has made this category at the top of their list for the procurement of equipments. It gives special focus to the Medium and Small Manufacturing Enterprises (MSME) sector.
Legislations and Procedure Applicable For Def-Tech Startups in India:
• Industries (Development and Regulation Act), 1951– Governs industrial licensing for manufacture of defence items
• Defence Procurement Procedure, 2016– Governs procedure for capital acquisitions in the defence sector
• Foreign Direct Investment Policies and Regulations And Foreign Exchange Management Act, 1999 (FEMA)– Governs policy on foreign direct investment and regulations on foreign exchange
• Other Specific Statutory Legislation-Indian Army Act, 1950; Indian Air Force Act, 1950; Indian Navy Act, 1957– Statutory provisions and supplementary rules concerning government, regulation, administration, enrollment and discipline of the Army, Air Force and Navy.
Regulatory Agencies:
• Department Of Industrial Policy and Promotion, Ministry Of Commerce & Industry (DIPP)-DIPP undertakes Formulation and implementation of industrial policy considering the changing foreign direct investment policies.
• Department Of Defence Production, Ministry Of Defence-the key agency that deals with the production of defence equipment in the country.
• Defence Acquisition Council, Ministry Of Defence-Responsible for any acquisition made for the Indian defence forces.
• Defence Offsets Management Wings, Ministry Of Defence-Reviews the post agreement status of all the offset agreements entered into by Indian Offset Policy
Regulatory Frameworks
International Regulatory Framework: The main focus of all the international export control regimes is that it seeks to secure the non proliferation of weapons of mass destructions (WPD), missiles and conventional ammunition. Some of the examples are nuclear suppliers Group, Wassenaar Arrangement, The Missile Technology Control Regime (MTCR). India has become a part of MTCR which gives a huge boost to access the international market for missiles that helps the nation to strengthen the technology in defence sector.
Domestic Regulatory Framework: The domestic regulatory framework is controlled by the following legislations:
• The Foreign Trade Act (1992)
• The Foreign Trade (Development and Regulation) Act, 1992 forms the basis for India’s export trade regime, including in the defence industry. The government regulates, restricts, prohibits all or specified classes of exports and imports. It also helps the government to prepare the Foreign Trade Policy (FTP).
Intellectual Protection (IP) Protections for Def-Tech Start-ups in India
There are legislative provisions relating to the connection of defence and security, and Intellectual Property (IP) in India.
• The Patents Act, 1970: The most important provisions in the Patents Act 1970 from a defence perspective are those which provide the Central Government or any person authorized by the government the right to use inventions for the purposes of nation’s defence industry. An invention is used for the purposes of government if it is made, used, exercised or purchased for the purposes of the state, state government or a government undertaking.
• The Designs Act, 2000: The Designs Act, 2000 regulates design as substance which is a mere mechanical device or any trademarks, property mark. The Controller-General (CG) of Patents, Designs and Trademarks has powers alike its powers under the Patents Act to direct non-disclosure of any information regarding a registration or application under the Designs Act which is considers prejudicial to the interest of the security of India.
The Indian laws aim to provide protection to the national interest of the Security of India. The foray of the private sector and foreign investment has led to better research and development along with procurement of quality equipment which has improved the state of military in the country. Indian companies aim to partner with foreign Original equipment manufacturing (OEM) to fill the lacuna in technology development. The major advantage is the cost reduction of the manufacturing by using local skills of the state.
Authored By: Adv. Anant Sharma & Shivangi Ghosh