Explore India’s innovative OGEL policy - simplifies defence exports, accelerates global trade, and empowers domestic manufacturers under the Make in India initiative.

1. Executive Summary

India’s journey toward bolstering its defence manufacturing sector has accelerated in recent years. A notable stride in this direction was taken in 2019, when the Indian Ministry of Defence introduced Open General Export Licences (OGELs)—a regulatory instrument designed to streamline and enable the export of specific defence goods and technology to select partner countries, under a more flexible, streamlined regime. In this article, we unpack the rationale behind OGELs, the mechanics of their issuance, the scope of permitted exports, compliance prerequisites, strategic implications for exporters, and the future outlook.

2. What Is an Open General Export Licence (OGEL)?

An Open General Export Licence is essentially a one-time licence that remains valid for a fixed period-commonly two years—allowing the licensee to export or transfer multiple eligible items within that timeframe without applying for separate authorisations for each shipment or transfer.

There are two distinct categories:

OGEL for Parts & Components: Permitting exports of defined defence-related parts and components.
OGEL for Intra-Company Transfer of Technology: Allowing technology or software transfers within corporate group entities (from Indian subsidiary to parent or sibling overseas entities).

Both licences carry stringent eligibility criteria, are issuance-based (not self-serve), and are operationalized by the Department of Defence Production (DPP), on a case-by-case basis.

3. Background: Why Introduce OGELs?

For decades, India remained a net importer of defence-related hardware. However, over the years, the government, particularly under the "Make in India" initiative and a push toward self-reliance, has sought to elevate domestic defence exports. Growth in export volumes and heightened private sector engagement demanded a more agile licensing mechanism. OGELs were introduced in October 2019 to:

Enhance ease of doing business by reducing bureaucratic friction.
Accelerate defence exports by simplifying licensing for eligible goods and technologies.
Encourage intra-company collaboration, particularly in multinational or group entities.

Consequently, OGELs were a direct response to industry demands and to plug regulatory gaps that were perceived to impede export momentum.

4. Countries Covered by OGELs

One key feature of these licences is that they are destination-specific. OGELs were initially approved for exports and tech transfers to:

Belgium, France, Germany, Japan, South Africa, Spain, Sweden, United Kingdom, United States, Canada, Italy, Poland, and Mexico

Notably, other significant defence trading partners, such as Russia and Israel, were absent from the initial list. Exports to Special Economic Zones (SEZs) were explicitly prohibited under OGEL regimes.

5. Scope: What Items and Transfers Are Covered

OGELs delineate clearly what is permitted—and what is not.

Permitted under OGEL for Parts & Components:

Components of ammunition and fuze-setting devices, excluding energetic or explosive materials.
Firing control systems and related alerting or warning equipment and systems.
Body-protective items, such as ballistic armour components, and related systems.

Permitted under OGEL for Intra-Company Transfer of Technology:

Software or technology related to firing control and alert systems.
Technology for aircraft, lighter-than-air vehicles, unmanned aerial vehicles (UAVs), aero-engines, aircraft equipment and components-except complete aircraft, complete UAVs, and components specially designed or modified for UAVs.
Technology related to body-protective items.

What’s Excluded:

Complete aircraft.
Complete UAVs.
UAV components specially designed or modified for UAV use.
Exports to SEZs, as these are out of scope.

6. Eligibility and Application Process

Companies seeking OGELs must meet these criteria:

Possess a valid Import-Export Code (IEC).
Submit required documentation and declarations, detailing the requested transaction(s).
Submit regular transaction reports—quarterly and year-end—to the DPP for verification and compliance monitoring.

The DPP examines each application on a case-by-case basis, with decisions resting upon compliance history, the nature of export, requester credentials, and alignment with national policy objectives.

7. Compliance, Reporting, and Enforcement

OGELs come with detailed compliance expectations:

Record-keeping: Licensees must maintain comprehensive records of all exports or transfers.
Reporting same: Quarterly reports plus a consolidated year-end report must be submitted for post-export verification by the DPP.
Audit rights: The competent authority reserves the right to audit and withdraw or suspend OGELs in cases of misuse or non-compliance.

Concerns raised by industry voices include a lack of clarity regarding:

Application formats and documentation requirements.
Definitions of “correct usage”.
Mechanisms for exporters to appeal or challenge suspension or revocation decisions.
The two-year validity period, which may fall short for long-term contracts.

Nonetheless, these provisions aim to strike a balance between facilitation and oversight.

8. Impact to Date: Growth in Defence Exports

OGEL introduction coincided with a period of dramatic growth in India’s defence exports:

Authorisations increased from 254 in 2016-17 to 668 in 2018-19.
Export value rose from approximately ₹1,522 crore to ₹10,745 crore in the same period (a more than seven-fold increase).

The draft Defence Production Policy 2018 set a target of ₹35,000 crore in defence exports by 2025, a goal that seemed more reachable with simplified mechanisms like OGELs in place.

9. Strategic Implications for Exporters

A. Regulatory Ease of Doing Business

OGELs reduce paperwork and licensing turnaround times, especially where firms have repeat or predictable export patterns. This boost to transactional efficiency is a key strategic advantage.

B. Predictability

With a two-year window, exporters gain operational flexibility and can plan supply chains and production cycles more confidently.

C. Corporate Structuring

OGELs for intra-company tech transfers can empower Indian subsidiaries of multinational entities to streamline R&D transfer and collaboration, reinforcing integration in global supply chains.

D. Limitations and Risks

The destination list is narrow; key partners like Russia and Israel are excluded.
OGELs are one-off, requiring re-application beyond two years—even for ongoing contracts.
Ambiguities in compliance expectations, application dossiers, and redress mechanisms could hamper uptake or lead to disputes.

E. Cross-border Competitiveness

Simplified licensing could make Indian defence manufacturers more competitive globally, especially in markets like Europe or North America, subject to OGEL applicability.

10. National Strategy: OGELs within the ‘Make in India’ Framework

OGELs dovetail with India’s broader strategic push:

Self-reliance in defence: Encouraging domestic manufacturing and reducing reliance on imports.
Defence Exports as Growth Drivers: OGELs are part of the toolkit to meet export targets, incentivise investment, and nurture private-sector capacity.
Global Integration: By easing inter-company tech flows, India becomes a more attractive destination for foreign investment and collaboration.

11. Critical Appraisal: Strengths and Areas for Improvement

Strengths:

Flexibility and scalability: One licence, multiple shipments/transfers.
Encourages industrial growth and private sector engagement.
Time-bound predictability, supporting planning and execution.
Aligned with strategic objectives of enhanced exports and technology diffusion.

Areas for Enhancement:

Transparency: Clearer application forms, checklists, and procedural guidelines.
Appeals Framework: Mechanisms to challenge rejections or revocations.
Validity Flexibility: Longer validity for long-term multi-year export contracts.
Destination Inclusion: Periodic review to include evolving partner countries.
Digital Reporting: Streamline compliance obligations through a unified digital portal.

12. The Road Ahead: Sustaining Momentum

To sustain and amplify the impact of OGELs, India could consider:

Expanding country coverage to include newer partners based on strategic alignment.
Digitising full-cycle management-application, issuance, reporting, and renewal—via a portal akin to SPIRE (UK model).
Stakeholder outreach and training to equip exporters with compliance best practices.
Regular policy reviews, ensuring OGEL terms evolve with industry feedback.
Incentivising adoption by offering fast-track processes or promotional support for early adopters.

13. Comparative Perspective: UK’s OGEL Framework

For context, the UK has a robust OGEL regime covering dual‑use and military goods. The UK’s OGELs:

Are pre-defined, publicly listed, and immediately usable upon registration.
Cover specific destinations and item categories, subject to compliance conditions.
Require record-keeping, annual reporting, and are enforceable with criminal penalties for violations.

India’s OGELs—though structurally similar—are currently more restrictive and less opaque. A future roadmap could look at the UK model for inspiration in terms of transparency and operational ease.

To sum-up - India’s Open General Export Licence regime represents a critical lever in its strategic shift toward self-reliance and global integration in defence manufacturing. By offering a simplified, multi-use licensing route for specified goods and intra-company tech transfers to select partner countries, OGELs have already played a role in the country’s export surge.

To build upon these gains, India must enhance transparency, streamline processes, broaden coverage, and ensure exporter-friendly compliance ecosystems. In doing so, OGELs could become not just a mechanism—but a competitive advantage for India’s defence industrial base.

Open General Export Licence (OGEL): India’s Strategic Shift in Defence Trade