Maharashtra Aerospace & Defence Manufacturing Policy - 2018

India features amongst the top 10 countries in the world based on its defence spend. In 2014, India spent USD 45.2 billion which was about 2.21% of its GDP. Over the last decade, India's annual defence expenditure has grown by over 231%. India's Defence spending is expected to be more than double to reach USD 120 billion over the next decade.

Today, nearly 70% of the country's defence requirement is met through imports. The Government of India (GoI) intends to reduce the share of defence imports to 30%; which will be in turn increasing local sourcing and propel domestic manufacturing. One of the first steps in this direction was to increase the FDI limit in the defence sector from 26% to 49%.

Aerospace Industry Context

The global aerospace industry is estimated to be around USD 1 trillion and is growing at an annual rate of 3-4 percent. Much of this growth will be supported by market expansion in developing countries, such as India, where the aerospace market is expected to grow in excess of 10 percent, as the government is focused on driving indigenous manufacturing in the sector. The Indian civil aviation industry is among the top 10 in the world with a size of around USD 16 billion. According to a report, Indian carriers are expected to double their fleet size by 2020 to 1,000 aircrafts, promising a huge opportunity for the maintenance, repair and overhaul (MRO) business. India's MRO segment is estimated to grow furthermore at 10 percent to reach USD 2.6 billion by 2021.

The Opportunity

The Indian Aerospace & Defence Industry is at the threshold of entering into a new era where it will play a greater role in making the nation self-reliant in Aerospace & Defence production. According to an estimate, the total Aerospace & Defence expenditure is expected to be between Rs 90,000 cr to Rs. 1,20,000 cr (US$15-20 billion) in the next five years. This growth potential is expected to attract major global companies to invest in India. Defence and Aerospace is also one of the key manufacturing sectors identified by the GoI as part of its 'Make in India' campaign. The Government of Maharashtra (GoM) is very keen on taking this as an opportunity to attract investors in the defence and aerospace industry.

Maharashtra: The Preferred Industrial Investment Destination

Maharashtra has been the preferred investment destination for both domestic and foreign companies because of availability of skilled manpower, enabling infrastructure and socio economic development. In order to further improve the investment climate in the state, which will help the state in sustaining its lead position and in realizing its full potential, the Government of Maharashtra has undertaken a few measures - Make in Maharashtra initiative and Ease of Doing Business being key ones.

• •MAITRI: Maharashtra has established the Maharashtra Industry, Trade and Investment Facilitation Cell (MAITRI) to provide liaisoning services required to industries with investment of more than Rs. 10.00 crores. It tracks approvals, addresses investor queries, and works towards addressing investor grievances. A single window clearance system under MAITRI will be created for State Government approvals for Aerospace and Defence units.
• •Ease of Doing Business: Maharashtra has been continuously implementing policy, regulatory and process level reforms to improve India's position in World Bank's Ease of Doing Business rankings. As a part of this process, the State government has substantially reduced the number of procedures and time taken for various permissions to set up an industry in Maharashtra.
• •Industrial Policy 2013: The Industrial Policy released by the GoM in 2013 is aimed at accelerating investment flow into the State and creating more job opportunities. In addition, the policy also aims at improving the processes and regulations to create a more business friendly environment and improve the ease of doing business parameters for investors. With this, the State Government also announced the 'Package Scheme of Incentives, 2013' providing significant fiscal incentives to new and existing industries to set up industries or expand operations. These measures have successfully attracted investments in regions such as Mumbai, Pune, Nashik, Aurangabad and Nagpur.

Maharashtra is the most industrialized State in the country, which also reflects in the industrial infrastructure that has come up in the State. The maturity of available infrastructure will greatly benefit new establishments from the Aerospace & Defence Industry.

Infrastructure

• •MIDC has set-up over 280 industrial estates in the state, which has given an impetus to industrial development in Maharashtra.
• •Major industrial complexes have infrastructural facilities such as 24 X 7 electricity, water supply, CETP, fire stations etc.
• •Dry Ports, Truck Terminals and Railway Sidings have been built for easy freight movement.
• •Home to 2 major ports and 53 minor ports; carrying 21.76% of the country's cargo.
• •Has 3 International Airports with a fourth one under development.

Clusters

Cluster development, led by one or more anchor units and supported by multiple MSMEs is key to the growth of any sector. Presence of HAL has led to development of the defence cluster near Nashik. Some of the defence OEMs from the Private sector are manufacturing defence vehicles for the Indian Army; at the same time there are industrial units producing defence components that are based in Pune. Nagpur is also growing as Aerospace hub with the MRO at MIHAN. Mazgaon Dock in Mumbai is India's prime shipyard for manufacturing warships and submarines.

Skilling

Maharashtra has well established engineering and technical institutes. There are 857 engineering Degree and Diploma colleges in the state with an annual intake capacity of more than 3.25 lakhs. In addition, there are 871 Industrial Training Institutes (ITIs) with an intake capacity of more than 1.25 lakhs. The literacy rate is around of 83 percent, which is much better than the national average. The state is also home to the renowned Defence Research and Development Organization (DRDO) Research and Development Lab at Pune, established to enhance indigenous capacity and design weapons for the three services. There is also the prestigious academic institute Defence Institute of Advanced Technology (DIAT) in Pune.

Presence of Diverse Industries

Maharashtra has presence of various sectors such as IT/ITeS, Auto and Auto Component, Engineering, Textile and Food processing. The IT/ITeS sector has a huge presence in Pune and Mumbai. Pune also houses the Auto and Auto component industry. Many Engineering and Auto companies are also located at Aurangabad. This ecosystem created by these industries in terms of supply chain, skills etc. will act as a support for the Aerospace & Defence manufacturing units.

Vision

To establish Maharashtra as the preferred investment destination for domestic Defence & Aerospace manufacturing, promote indigenous and modernized technological capabilities, develop world class skilled man power, and support MSMEs to be globally competitive in the Aerospace & Defence sector.

Mission

• •To promote Maharashtra as the Aerospace & Defence manufacturing hub.
• •To develop Maharashtra as the Defence R&D and innovation centre.
• •To develop Maharashtra as an export hub for Aerospace and Defence products.
• •To develop industry ready skilled manpower for the Aerospace & Defence sector.
• •To promote Maharashtra as globally recognised MRO hub.

Policy Objectives

• •A. To attract investment worth $ 2 billion in the next five years in the Aerospace & Defence Sector.
• •C. To develop world class skilled manpower in collaboration with the industry stakeholders.
• •C. To create 1 lakh employment opportunities over the next five years.
• •D. To promote the building of indigenous advanced Aerospace & Defence technology.
• •E. To promote Defence MSMEs to compete at global level.

Strategy

The state shall adopt the following strategies to achieve its policy objectives:

• •Anchor Units: Anchor units are the most crucial components for building an ecosystem for a cluster. The State will provide special incentives as well as any other kind of support required to such units in the form of Fiscal and Non-Fiscal Incentives.
• •Development of Nagpur MRO into a Global Hub for Airlines: Leverage the strategic location and existing MRO facility of Nagpur to develop it as a Global Hub for Airlines. Concessions on State Goods and Service Tax (SGST) on Service Parts at the Nagpur MRO to make it a preferred choice for low-cost carriers.
• •Promotion of Indigenous technology and R&D: Need-based support to R&D institutions set up with the approval of the State Government. Fiscal and Non-Fiscal incentives will be provided to investors who set up Aerospace & Defence related R&D centres. This facility will also be extended to the unit holders engaged in R&D for their own purpose. Testing facilities, incubation and innovation centers will also be covered.
• •Human Resource Development: Incentive to units for training cost to develop skilled human resources. Focus on imparting vocational training and provide support in upgradation of Engineering Colleges, Polytechnics & ITIs.
• •Thrust on MSMEs: MSMEs clusters will form a supplier base to anchor units. Incentives will be provided to assist in market development, quality certifications and patent registration etc.
• •Support to collaborate with public sector enterprises: Special support would be provided to units established in joint collaboration with public sector enterprises of defence sectors/units under the Ministry of Defence. The benefits under the policy will be made applicable to Joint venture units.

The policy will be valid for 5 years.

Coverage

Verticals included in eligible Aerospace & Defence sector including civil aviation will be as per Annexure 'A'. This list will be subject to modification from time to time as and when Government of India modifies the same.

Applicability

Incentives under this policy will be admissible to following units:

• •Units which are manufacturing defence or aerospace products / equipments / contraptions as Original Equipment Manufacturer (OEM) and supplying them to defence establishments, armed forces (army, navy, air force and others), para-military forces, provincial forces of the Government of India or State Governments or to other countries / State sponsored organizations by way of exports through approved official channels of supply.
• •Ancillary Units which are manufacturing assemblies, sub-assemblies or components (along with or without other products) for defence or aerospace products / equipments / contraptions to Original Equipment Manufacturer (OEM) as defined above, or supplying not less than 80% of manufacturing equipment to them as replacement / spares to defence establishments, armed forces (army, navy, air force and others), para-military forces, provincial forces of the Government of India or State Governments or to other countries / State sponsored organizations by way of exports through approved official channels of supply.
• •MSME units which are manufacturing or doing some job work exclusively for the units described in the OEM and Ancillary categories above.

In case of some issue in respect of Coverage or Applicability, the competent authority for interpretation will be the Development Commissioner (Industries).

A defence manufacturer by whatever nomenclature when referred to means - for defence products requiring industrial license, an entity complying with all GoI's Department of Industrial Policy and Promotion (DIPP) requirements; and for defence products not requiring industrial license, an entity complying with all regulations in force applicable to that industry.

The Industrial Units which are not covered under the Aerospace & Defence Manufacturing Policy, 2018 will be eligible for regular incentives under the Industrial Policy.

Fiscal incentives shall be extended to eligible Aerospace and Defence units under the umbrella of Package Scheme of Incentives (PSI). A basket of incentives under applicable Package Scheme of Incentives will be offered to eligible Micro, Small, Medium manufacturing enterprises (MSME) and Large manufacturing enterprises (LE). MSME and LE units will be eligible for incentives at one scale higher than that of their taluka classification.

Mega Project Status

Aerospace and Defence units in A and B category areas with minimum Fixed Capital Investment (FCI) equal to Rs. 250.00 crores or minimum employment of 500 people, and units in rest of the state with minimum FCI of Rs. 100.00 crores or providing employment to 250 people will be accorded Mega project status.

The quantum of incentives for Mega projects shall be decided as per the provisions of IE&LD GR No. PSI-2013/C.R.-54/Ind-8 dated April 1, 2013 and any subsequent GRs or Guidelines issued based on the decisions in the Cabinet Sub-Committee or High Power Committee.

• •Admissible Investment Period: 8 years in Category A and B areas, and 10 years in other parts of the State.
• •Basket of Incentives: The amount of incentives to be given to such units will be as mentioned in the 'Template of incentive'.
• •Test Range & Storage Facilities: The investment incurred in erection of test range and storage facilities required by the unit will be considered as a part of admissible project cost. The expenditure on test range upto a ceiling of 20% of the total project cost or Rs. 100 Crores whichever is lower will be considered a part of admissible fixed capital investment for incentives. Investment in Test Range & Storage facilities on separate locations shall be permissible as per justified requirements. However, such facilities should be set up in the same category of taluka or lower category.
• •Acceptance of Products: The incentive period will be allowed to be commenced upon acceptance of the products by the Department of Defence, Government of India (MoD).
• •Technical Know-how: Since technical know-how constitutes a vital and substantial part of defence products manufacturing, expenditure on this as a part of admissible FCI will be allowed up to a ceiling of 20% of the total project cost or Rs. 100 Crores whichever is lower.
• •R&D for Own Purpose: If the industrial unit is engaged in Research and Development (R&D) activity for their own purpose, then the investment in R&D by the unit will be considered a part of admissible project cost up to 10% of the total project cost or Rs. 50 Crores whichever is lower.

Reimbursement of Stamp Duty

Eligible Aerospace and Defence units will be reimbursed stamp duty during the investment period, for acquiring land and for term loan purposes.

Disbursement and Carrying Forward Rules

• •The amount of incentives to be disbursed to MSMEs and LEs every year will be limited to 1/10th of the total Basket of incentives sanctioned, with the provision of carrying forward the differential between the actual sanctioned amount for a given year and the yearly disbursement limit.
• •For Mega Projects/Ultra Mega Projects, if the Eligibility Certificate (EC) period is more than 10 years, the yearly limit for disbursement shall be equal to the total quantum of incentives divided by the number of years as per eligibility period, with the provision of carrying forward the differential.
• •No Operative Period: For Aerospace and Defence units under this policy, there will be no operative period succeeding the eligibility period.
• •Expansion Criteria: Existing Aerospace and Defence units seeking benefits under this policy for expansion will be required to create minimum 25 percent more additional Fixed Capital Investment (FCI) than that of existing gross FCI, OR the said additional FCI should result in at least 25 percent increase in existing installed capacity, OR should result in at least 10 percent increase in employment in the non-supervisory category.

Anchor Units Pre-conditions

A unit will qualify as an Anchor Unit based on the following pre-conditions:

• •i. It should have qualified as a Mega or an Ultra-Mega Project.
• •ii. It should have a confirmed order book of USD 100 Million as on the date of application, from the MoD or similar bodies worldwide. Order books from large and established defence contractors/manufacturers will also be considered.

Up to a maximum of 10 anchor units will be qualified in the State during the investment period. Of these, at least 5 units should be from the Vidharbha & Marathwada regions. Anchor Units will be qualified on a first come-first serve basis, and in the case where multiple investors have applied, the final decision will rest with the High Power Committee.

Land Subsidies and Vendor Setup Rules

• •Land Rates Concession: Anchor units will be offered land at 75% of the prevailing land rates within the MIDC Industrial Areas falling in A & B category locations, and at 50% of the prevailing land rates at other locations. The maximum limit is 100 acres.
• •Lease / Sublease Restrictions: Lease or sublease of the land will be permitted only to licensed Aerospace and Defense manufacturing companies/units.
• •Change of Use Restriction: 'Change of land use for other than eligible defense manufacturing activities' will not be permitted in future. If unavoidable reasons compel a 'Change of Use', the unit must refund all concessions availed from MIDC along with penal interest.
• •Vendor Setup Space: Anchor units will be allowed to utilize 20% of the land for facilitating set up of their vendor units.

Water, Service Charges and Fire Cess Concessions

If any Mega / Ultra Mega Project in MIDC area obtains a Building Completion Certificate (BCC) and commences commercial production within the admissible development period, then it shall be eligible for concession in water charges, service charges and fire cess as per the following table:

The above concessions will be provided for the balance original development period counted from the date of obtaining BCC and commencement of commercial production.

Industrial Townships (Walk-to-Work)

In order to promote the concept of walk-to-work, Defence and Aerospace parks & Mega, Ultra-Mega and Anchor Units which are established on a minimum area of 40 hectares outside the MIDC area and which are engaged in manufacturing activities will be considered under the Integrated Industrial Area (I.I.A.) Policy of the State government.

If parks & units engaged in Electronics manufacturing of defence & Aerospace equipments are established on a minimum area of 10 hectares, they will be covered under the Integrated Information Technology Townships (I.I.T.T.) of the prevailing IT & ITeS Policy of the Government of Maharashtra.

Promotion of Common Facilities

MIDC will on a case-to-case basis assist in setting up Common Facility Centers for the Aerospace and Defence Industry. The common facilities may include a test firing range, testing and research laboratories, and any such activities required by the sector.

• •MIDC Equity: MIDC shall offer equity in the form of land and financial assistance to the extent of 15% of the project cost including the cost of land, subject to a maximum of Rs. 15 Crores.
• •Private Player Scope: The private players will build, operate, and own common facilities for areas such as training, testing, design, etc.
• •FDI Precondition: To be eligible, the Private Sector player will need to make a minimum investment of Rs. 100 Crores through FDI from an established common facilities services provider in the Aerospace & Defence sector.
• •SPV Formation: A Special Purpose Vehicle (SPV) may be formed in clusters to develop such common facilities.

Defence and Aerospace Manufacturing Industrial Clusters

Land will be made available to Clusters as per the prevailing policy of MIDC. If at least 20 or more Micro, Small and Medium industrial units form an SPV, the State Government will sanction Rs. 15 Crores as the State's share in the Central Government's Micro Small Enterprises Cluster Development Programme (MSE-CDP).

The State Government's prevailing policy of Maharashtra State Industrial Cluster Development Programme (MSI-CDP) will be amended and for each Defence and Aerospace Manufacturing Industrial Cluster Rs. 15 Crores will be sanctioned for the SPV.

Equity Fund for MSMEs

To support enterprises in the Defence and Aerospace Manufacturing Sector in the state, a Corpus of Rs. 1,000 Crores will be created by the State Government. The Maharashtra Industrial Development Corporation will contribute to the fund.

Promotion of Nagpur MRO

In order to promote Nagpur as a Global Hub, any Airline that sets up its Global Hub at Nagpur and utilizes its MRO facilities will be provided with the following incentives:

• •50% reimbursement of VAT on Aviation Turbine Fuel (ATF).
• •100% reimbursement of State Goods and Service Tax (SGST) on Service Parts.

Support to R&D Institutions

In order to give impetus to Research and Development, need-based support will be provided to:

• •i. R&D institutions set up with the approval of the State Government.
• •ii. Any private institution engaged in R&D activities as per the Defence Long Term Technology Plan, and industrial units engaged in R&D activities for their own purpose.
• •iii. New and existing R&D institutions, testing facilities, incubation and innovation centers.

• •Financial Assistance: Up to 50% of the project cost excluding land and building, subject to a maximum amount of Rs. 10 crores.
• •Additional FSI: Additional FSI of 0.5 will be provided to eligible R&D units.

Promoting Skill Development

• •Vocational Upgradation: The State shall upgrade vocational and technical training courses for meeting growing needs of skilled and semi-skilled manpower. Foreign investment in training facilities for skilled workers, engineers and managers will be encouraged.
• •VTI Adoption: Private sector companies will be encouraged to adopt vocational training institutes whereby they can use the infrastructure to provide training in relevant skills.
• •Curriculum Upgradation: Infrastructure & Curriculum will be developed by upgrading ITIs, technical/vocational schools, Polytechnics, and Engineering Colleges through private partnership.

Earmarking Land for Defence Parks

Across the state, multiple 200 acres of land will be earmarked for aerospace and defense parks and townships. This may include specialty parks such as Missile Integration, Aerospace, etc.

Marketing Assistance

• •MSME International Trade Fairs: Reimbursement to MSME units for participation in International trade fairs of Aerospace and Defense products outside India at the rate of 50% of total rent, literature and display material cost, subject to a ceiling of Rs. 3.00 lakh, once in a year. The unit must participate only as a part of the Industry Association, and apply within six months of participation.
• •Industry Association Pavilion: Reimbursement to Industry Associations at 50% of total rent subject to a ceiling of Rs. 10.00 lakh for participation in International trade fairs as a Maharashtra Pavilion outside India, for participation by a minimum of 5 units. Admissible once in a year.
• •Viability Gap Support for Seminars: Support to Industry organizations to conduct National seminars/exhibitions subject to a ceiling of Rs. 10 lakhs for National, and Rs. 25 lakhs for International trade Seminars/Exhibitions in Maharashtra.

Labour Reforms

Aerospace and Defence units administered by the Labour Department of the State Government will benefit from:

• •Relaxations under the Shops and Establishment Act with regard to working hours, work shifts and employment of women.
• •Exemption from maintaining physical records for attendance and salary.
• •Option for self-certification and filing of consolidated annual returns under 13 Acts.
• •Permission to maintain employee-related records required under various labour laws in electronic form, and to accept returns in electronic form.

Essential Services Status

The Aerospace and Defence Industry will be declared as an essential service under the 'Maharashtra Essential Services and Maintenance Act' (MESMA). The Government would make necessary amendments in the Act to include this industry in the list of essential services.

Pollution Control Board (MPCB) GREEN Consent

Aerospace and Defence units involving only assembly type of manufacturing activities, not discharging process effluent, and with less than 100 employees, will be exempt from obtaining consent from the Maharashtra Pollution Control Board (MPCB).

• •Green Category: Such units will be covered in the GREEN category of consent if they submit an application in the prescribed format to M.P.C.B. GREEN consent can be valid from a minimum of 6 years to a maximum of 15 years.
• •High Priority Fast-track: Consents will be given high priority. MPCB has started AUTO consent renewal as a fast-track arrangement. Once a proposal is submitted in the prescribed format with all required documents, it can be cleared within 10 days by convening a special meeting.

Other Relaxations

• •Continuous Power Supply: Aerospace and Defence units will be treated as continuous process industry for the purpose of power supply.
• •Technological Upgrades: To adopt new changes in technology, if a unit changes machinery due to technological shifts but keeps the capital investment the same, prior permission of the Industries Department will not be required.

Defence sector manufacturing will constitute manufacturing systems, sub systems and components of the defence items notified by the Department of Defence Production, Ministry of Defence through Press Note No. 3 (2014 Series) which require an Industrial License. Components and subsystems which go into making the defence system/item listed in the press note and do not require an industrial license are also eligible.

Defence items defined as per the in-vogue Defence Procurement Procedure (DPP) will also be included, as well as the manufacture of components, systems, sub-systems and components for civil aviation. This list of items gets modified whenever the Government of India modifies notification releases under Press Note No. 3 (2014 Series).

A. Arms and ammunition and allied items of defense equipment; parts and accessories thereof.

All Rifle & Smooth-bore weapons and other arms, automatic/Semi-automatic or pump action type weapons, Weapons using case less ammunition, Silencers, special gun-mountings, weapons sights, signature reduction devices and flash suppressors to include rifles, carbines, revolvers, pistols, machine pistols, multi barrel rocket, machine guns, guns, rocket, cannon & missile systems -used on land, ships & shore based and airborne, howitzers, mortars, anti-tank weapons, projectile launchers, military flame throwers, rifles, recoilless rifles.

Ammunition and fuze setting devices including: a. Safe and arming devices, fuzes, sensors and initiation devices; b. Power suppliers / cartridges with high one-time operational output; c. Combustible cases for charges; d. Submunitions including bomblets, minelets and terminally guided projectiles.

Bombs, torpedoes, grenades, smoke canisters, rockets, mines, missiles, depth charges, demolition charges, demolition-devices, demolition kits, aircraft missile protection systems (AMPS), 'pyrotechnic' devices, cartridges and simulators, specially designed for military use.

'Energetic materials' and related substances including all explosives like primers, boosters, initiators, igniters, detonators, smoke bomb, colour signals, propellants and pyrotechnics, oxidizers, binders, plasticizers, monomers, additive coupling agents, Precursors and other related ammunition.

High velocity kinetic energy weapon systems and related equipment: a. Kinetic energy weapon systems specially designed for destruction or effecting mission abort of target; b. Specially designed test and evaluation facilities and test models, including diagnostic instrumentation and targets, for dynamic testing of kinetic energy projectiles and systems.

Directed Energy Weapon (DEW) systems, related or countermeasure 'equipment and test models' as follows: a. 'Laser' systems specially designed for destruction or effecting mission abort of a target; b. Particle beam systems capable of destruction or effecting mission abort of a target; c. High power Radio-Frequency (RF) systems capable of destruction or effecting mission abort of target; d. Equipment specially designed for the detection or identification of, or defense against, systems at (a) and (c) above; e. Physical test models for the systems, equipment and components specified under this head; f. 'Laser protection equipment (e.g. eye and sensor protection)'.

Electronics Equipment: Electronic Equipment used for electronic counter measure (ECM) and electronic counter countermeasure (ECCM), surveillance, intelligence, Command and Control systems, Global Navigation satellite systems (GNSS) jamming equipment. Data processing, storage and transmission security equipment, identification and authentication equipment (including identification Friend or Foe and non-Cooperative Target Return Identification systems), guidance and navigation equipment, Troposcatter-radio communications equipment, and Military Information Security assurance systems and equipment (like cryptographic devices including military Cryptographic key management and Cryptanalytic systems), communication equipment, frequency modules and secrecy devices, specially designed for Military use.

Armoured or protective equipment: a. Constructions of metallic or non-metallic materials, or combinations thereof, specially designed to provide ballistic protection for military systems; b. Body armour or protective garments of level III (NIJ 0101.06, July 2008 or national equivalent and above). Specialized equipment for military training, or simulators specially designed for training in the use of any firearm or weapon.

Imaging or countermeasure equipment specially designed for military use: a. Recorders and image processing equipment; b. Image intensifier equipment; c. Infrared or thermal imaging equipment; d. Imaging radar sensor equipment; e. Countermeasure or counter-countermeasure equipment.

Miscellaneous: Concealment and deception equipment specially designed for military application, including but not limited to special paints, decoys smoke or obscuration equipment and simulators, and Metal embrittling agents.

B. Tanks and other armoured fighting vehicles.

Ground vehicles as follows: a. Ground vehicles namely tanks and other military armoured/armed vehicles and military vehicles fitted with mountings for arms or equipment for mine laying or the launching of munitions includes all tracked and wheeled self-propelled armoured and non-armoured weapon systems and trailers for towed and static weapon systems; b. Other ground vehicles namely all-wheel drive vehicles capable of off road use which have been manufactured or fitted with materials or components to provide Ballistic protection to level III (NIJ 0108.01, September 1985, or comparable national standard or above) with mountings for arms or equipment for mine laying specially designed for military use; c. Amphibious, hovercrafts and deep water fording vehicles for military use. Cryogenic and superconductive equipment especially designed or configured to be installed in military vehicles.

C. Defense aircraft, space craft and parts thereof.

'Aircraft' including but not limited to helicopters, 'lighter-than-air vehicle', 'Unmanned Aerial Vehicles' (UAVs), Remotely Piloted Vehicles (RPVs), autonomous programmable vehicles, and unmanned lighter than air vehicle (to include all variety of manned and unmanned airborne vehicles - includes target systems, loitering missiles, drones, balloons, blimps, aerostat, parachutes, paragliders, ground effect machines, air cushion vehicles/hovercraft, UAVs and launchers, designed for military application).

D. Warships all kinds.

a. Vessels of war (surface or underwater), other surface vessels (Fitted with automatic weapons having a caliber of 12.7 mm or higher, CBRN protection, active weapon countermeasure systems), special naval equipment, antisubmarine/ torpedo nets, hull penetrators and connectors 'specially designed for military use'; b. Air Independent Propulsion (AIP) systems (nuclear/conventional) for marine applications.

E. Products for Internal Security

• •a. Arms and their ammunition including all types of close quarter weapons.
• •b. Protective Equipment for Security personnel including body armour and helmets.
• •c. Vehicles for internal security purposes including armoured vehicles, bullet proof vehicles and mine protected vehicles.
• •d. Riot control equipment and protective as well as riot control vehicles.
• •e. Specialized equipment for surveillance including hand held devices and unmanned aerial vehicles.
• •f. Equipment and devices for night fighting capability including night vision devices.
• •g. Navigational and communications equipment including for secure communications.
• •h. Specialized counter terrorism equipment and gear, assault platforms, detection devices, breaching gear, etc.
• •i. Training aids including simulators and simulation equipment.

F. Civil Aerospace Product

• •a. All types of fixed wing as well as rotary aircraft including their air frames, aero engines, aircraft components and avionics.
• •b. Aircraft design and engineering services.
• •c. Technical publications.
• •d. Raw material and semi-finished goods.
• •e. Flying training institutions and technical training institutions (excluding civil infrastructure).