Validity of Industrial License extended pursuant to the Press Note 1 of 2023

The Department for Promotion of Industry and Internal Trade (“DPIIT”) has, in supersession of Press Note No. 5 (2014 series) (“2014 Press Note”), notified the Press Note No.1 (2023 Series) dated July 21, 2023 (“2023 Press Note“). The 2023 Press Note updates the validity period and other guidelines for granting industrial licenses under the Industries (Development and Regulation) Act, 1951 (“IDR Act“).

The validity period of new/ existing industrial licenses is extended from 3 (three) years to 15 (fifteen) years for all licenses granted under the IDR Act. The said extension aligns with the validity of the licenses issued for defence items which were initially revised to 15 (fifteen) years and extendable to 18 (eighteen) years as per Press Note No. 10 (2015 Series) in view of the long gestation period under defence contracts). An extension of 3 (three) years may be granted on top of the 15 (fifteen) years as per the guidelines provided in the 2023 Press Note.

The guidelines for extending the validity of existing industrial licenses have also been revised as follows-

Applications for extension must be submitted to the concerned Administrative Ministry or the Explosives Section (DPIIT) before the 15 (fifteen) year period expires for commencement of commercial production.
Existing industrial licensees must maintain the same condition and status as at the time of issue and any change in the company name, board of directors, license capacity, premises etc. should have already been endorsed in the existing industrial license.
Applicant’s request would be first forwarded to the concerned Central/State Government, as maybe relevant, and after obtaining comments of the Central/State Government, the case would be considered for extension by the DPIIT. Comments of the Ministry of Home Affairs would be sought if there is change in the board of directors/key personnel of the applicant.
The applicant must meet certain conditions at the time of applying for extension, such as:
The applicant should have acquired land for a minimum 30 (thirty) years under ownership or on lease;
The construction on the project should have been completed (as per report of the relevant department of the State Government);
The plant and machinery for the concerned project should have been installed and commissioned (as per invoice and installation/commissioning certificate).
Cases involving transfer, suspension, or cancellation of industrial license in the intervening period will not be considered for extension.
Existing licenses can be extended on receipt of application from license holder within the 15 (fifteen) year period from issuance of the 2014 Press Note i.e., July 2, 2014. New licenses issued as per the 2023 Press Note, can be extended for a further period of 3 (three) years (up to maximum of 18 (eighteen) years of validity).
Industrial licenses wherein commercial production has not commenced even after the extended period (ie. 18 (eighteen) years from the date of issue of the license) will automatically lapse. In contrast, the 2014 Press Note permitted renewal of license for 2 (two) years and would automatically lapse if the commercial production did not start within a period of 5 (five) years.
Applicants who fulfil the revised guidelines may be granted an extension of their industrial license with the approval of the concerned Additional Secretary or Joint Secretary of the Administrative Ministry or the Explosives Section (DPIIT), without referring the application to the Licensing Committee.
License issued or lapsed/ regretted after 2014 Press Note, may also be reconsidered, as per the 2023 Press Note, on receipt of an application from the applicant, by the Administrative Ministry or the Explosives Section (DPIIT).

The above guidelines are applicable for extension of validity of industrial license in cases where the existing license holder has not commenced production within 15 (fifteen) years of issue of the license.

The 2023 Press Note is in line the Government’s stance to make it easier for businesses to obtain and extend industrial licenses which marks a positive step in boosting and bringing in more investments into the country and has been put in place to lighten industrialists’ compliance burden, creating a more advantageous, supportive and conducive business environment.

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