Govt extends validity of industrial licence to 3 yrs

NEW DELHI: With an aim to improve the ease of doing business in India, the government on Wednesday extended the validity of industrial licence from the existing two years to three years, with a provision for a further extension of two years. The licence will, however, lapse automatically after five years in absence of commencement of commercial production.

“The period of validity of industrial licence is being extended from two years to three years as a measure for ease of doing business,” the commerce ministry said in a statement. “However, if commercial production does not commence within five years, the licence will lapse.”

“CII hopes that this would help in faster clearance of new licence applications and extension of existing ones,” said Chandrajit Banerjee, directorgeneral, CII.

In case a company fails to start commercial production of items within three years of the issue of licence, the application for extension should be submitted to the concerned ministry 60 days prior to the expiry of the three-year period. Such request, in case of defence and explosive sectors, should be forwarded to the ministry of home affairs.

The decision is in line with the BJP’s election manifesto, which promised “that a conducive, enabling environment is created making ‘doing business’ in India easy. We will focus on cutting the red tape, simplifying the procedures and removing the bottlenecks”.