Corporates such as Mahindra & Mahindra, Larsen & Toubro and Ashok Leyland are showing an increased interest in the defence production sector.

More than half a dozen companies have applied for fresh industrial licenses to manufacture several defence related products such as guns, pistols, mount surveillance sensors and ancillary equipment, avionics, military aircraft, arms and armaments, cartridges for pistols, etc.

These proposals were considered by the licensing committee (sub-committee) in the last week of March, and some of them have been cleared, an industry ministry source said.

Sources said that it is interesting that there are applications to produce as high-technology products like even military aircrafts, etc.

Max Aerospace & Aviation has applied for industrial license to engage in the production of avionics, military aircraft, arms and armaments.

Similarly, Mahindra & Mahindra has sought license for modification of the Mahindra Pick-up to mount surveillance sensors and ancillary equipment.

Ashok Leyland Ltd is seeking a new license to manufacture light armoured multi-role vehicles.

Misratech has applied to manufacture 0.32 inch pistols with accessories, cartridges for 0.32 inch pistols, etc.

This apart, the licensing department also considered applications for shotguns and hand guns, explosives and bullet proof jackets.

Mahindra & Mahindra has been engaged with the defence sector for manufacturing armoured vehicles and Ashok Leyland for producing trucks.

The government had restricted private participation in the defence production sector until the end of 2000, when the cabinet cleared a proposal to allow private participation from both domestic as well as foreign companies.

As per policy guidelines, a foreign company cannot pick up more than 26 per cent shareholding in a company engaging in defence production. Private sector participation can, however, be 100 per cent.

So far, the government has not received any proposal for foreign investment in the sector. There are no proposals yet for foreign technology collaboration either, the sources said.

The government's decision to open up the sector was based on the assumption that a 26 per cent stake will not encourage foreign investors to make large investments in the sector.

But private companies, especially those which are engaged in the capital goods manufacturing sector, may venture into this business to use their unutilised capacities.

In a unipolar world and, with Russian support declining, India needs to create an independent indegenous support base for its defence sector.

On the other hand, while cost of imports of components and services is increasing, there is a huge potential for exports of defence products from India, it is felt.