Current Industrial Licensing Policy in India

Industrial Licensing was also abolished for all except short list of 18 industries in New Industrial Policy 1991. This number was further pruned to six industries. Currently (2015), only five industries are under compulsory licensing mainly on account of environmental, safety and strategic considerations. They are:

1. Distillation and brewing of alcoholic drinks
2. Cigars and cigarettes of tobacco and manufactured tobacco substitutes.
3. Electronic Aerospace and defense equipment: all types.
4. Industrial explosives including detonating fuses, safety fuses, gun powder, nitrocellulose and matches.
5. Specified Hazardous chemicals i.e. (i) Hydrocyanic acid and its derivatives, (ii) Phosgene and its derivatives and (iii) Isocyanates & diisocyanates of hydrocarbon, not elsewhere specified(example Methyl isocyanate)

Regarding Alcoholic products, we note that production of rectified spirit exclusively for industrial use falls under the Centre’s purview while in the case of potable alcohol, states have last word. {This is as per Supreme Court decision in “Bihar Distillery Case”}. So, DIPP is not the licensing authority in case of potable alcohol.