Law pertaining to the manufacture of airguns question

[mehulkamdar]

This is to revive a proposal that I had some time ago and discussed with some good friends on this forum though offline. I guess penpusher would be the best person to answer this series of questions though there may be others who may have some info as well...

1. What is the law pertaining to units manufacturing airguns in India? I am interested in knowing about licensing, tech transfer regulations and custom duty regulations for the import of capital equipment

2. Is technology transfer permitted in this field? Specifically if I have a EUropean manufacturer willing to offer technology for a royalty. Or, would it be permissible only if I also had a re-export provision for some of the production in payment for tech transfer?

3. What would be the rules pertaining to the import of some raw materials especially silicon steel springs, specialty washers etc? I am estimating that value would be to the tune of 70% over raw material costs though the addition may be even greater

4. As a Non Resident Indian (holder of an Indian passport living with a Green Card in the USA) can I run such a company with the association of partners based in India? My role would be to arrange financing and tech transfer from outside India. Also, would I be allowed to repatriate the loans/investment in the unit in India over time? To be honest, this is the part that frightens me the most

5. The technical tie up would be with one of the most reputable companies in the business and they have assured that they would help in every way as consultants to set the plant up and run it with quality control support in the future

If the possibilities are positive, then I just might hire some consultant to do a study on such a project in India though I am worried that they would not have the hard data on something like this as there is virtually no known collaboration of this kind. Only one Indian automobile manufacturer makes air rifles for a UK company on contract basis though they do not sell any in India. My proposal would have an Indian focus with the initial production targeted towards the 10 m match sports.

I would appreciate a response and suggestions on this. As this is likely to be a fairly big project in terms of investment and subsequent work and as I am not an airgunner - I don't even have an airgun - I would like to know what airgunning regulars think about this.

Cheers!

[art_collector]

Hi,

Thats such an interesting idea. Can't say about other manufacturers who must be anyway quite sick of IHP air guns - the standard in good quality airguns at the moment.
Welcome buddy all air gun lovers AWAIT U and I think many gun dealers too wud be happy to have some gud stuff for sale. I have heard a dealer saying while selling an air gun" lele loo sedhaa nahin martee, practice karne hai to national hi chale gee"
Hope this post dosent offend any one - dealer yaa manufacturer

AC

Post edited. I know it's still a bit early for some of you but please engage brain before posting.

[vishosingh]

hey mehul if your project gets through please book one airgun for me, i am dying to get my hands on a decent airgun.......hopefully you will offer a discount to all our ifg members!!!!!;
my best wishes are with you

[badshah0522]

One for me also ,A good customised version,Specially made to order.

[mundaire]

Sounds like a brilliant idea Mehul, there certainly is a market for quality airguns here.

As to your question regarding the repatriation of investment/ loans, unless something drastic happens to the economy here, it should not be a problem...

The manufacturing equipment would in all probability be CNC machines, they are under the OGL (open general license) category for imports, as are most capital goods these days (read as - allowed for import with minimum fuss).

Import of parts like springs, washers etc. should not be a problem (once again they are under the OGL), though they may end up pushing up your end-product price (due to custom duties on imports). If you wish to keep the end-price reasonable, you might want to think of looking for local OEM suppliers, if not at the outset then sometime down the line...

In fact these days most things can be imported into India without too many restrictions. EXCEPT of course for guns and ammunition!!

As to local competition, only IHP makes anything close to a match pistol, a CO2 based pistol which they sell for around INR 10,000/- or so. Obviously it is not up to scratch as none of the serious competitors seem to be using it...

As to the requirements for licenses etc. for producing air-guns, I am not too sure; but it would seem that it must not be very difficult, as so many small scale units produce them all over the country...

Cheers!
Abhijeet

[art_collector]

Thanx for editing the post. Didnt really think a 'word'cud be that offensive ....but then anyway life is about learning...wud be more careful in future.

AC

[mehulkamdar]

Gentlemen,

This proposal has been with me for some time now and it is workable if there is a possibility of getting the appropriate clearances etc in India. I do think that with the growing interest in the shooting sports and with the harsh laws that allow only airgunning to the aam janta, this could be a good project if it works out. But, I am hoping to get information on the if part. Hopefully, someone witht he knowledge of the legal issues here would respond.

Abhijeet,

I do not think there is the faintest possibility of the Indiane conomy going south, dips in the Sensex notwithstanding. My only fear, as I said, earlier, is that the bureaucracy would make the licensing part difficult at first and then find some way or the other to make the repatriation of funds difficult at a later stage. The Indian babu is a fearsome beast as many know - a terrible master and a perfect servant to those above him.

Let's see how this works out. I am planning to write to the Finance Ministry and to the Home Ministry with these questions if I cannot find this information anywhere.

Cheers!

[penpusher]

Mehul,

Have no idea about this.The govt. has through a notification excluded air rifles/pistols that pass a specific test from the provisions of the Arms Act and Rule's.Your best bet would be to use the RTI.As you are still an Indian citizen with an Indian passport,though residing in the US,you can apply for information under this Act.

Application for seeking this information (http://mha.nic.in/rti/rti-form.pdf)

Government of India
Ministry of Home Affairs
Application of seeking information under Right to Information Act, 2005.
PART-I
1. Name of the Applicant.
2. Gender: Male/Female:
3. Father’s/Mother’s full name
4. Address for correspondence
(with Pin Code) :
5. Telephone/Mobile No.
E-mail ID (if, any)
PART-II
(i) Specify the particulars of the information sought for in a separate
sheet
(ii) Whether the information sought for is required to be supplied
(a) In printed form.
(b) In diskette or floppy.
(iii) Whether inspection of records also sought
(iv) Whether application fee of Rs.10/- (Rupees ten only) paid and, if
so, please specify mode of payment.
(a) Please give details of the demand draft/Banker’s cheque
enclosed.
(b) In case of cash payment, please enclose original receipt.
(No fee is required to be paid if the requester belongs to ‘below poverty line’
category for which proof should be furnished).
Declaration of the Applicant
(a) I am a bonafide citizen of India and owe allegiance to the
sovereignty, unity and integrity of India and have not voluntarily
acquired the citizenship of another country.
Place :
Date:
(Signature of the applicant)

The PIO you will have to contact (at Sr. No.30 here http://mha.nic.in/rti/PIOs.pdf)

S.K. Malhotra
Dy. Secretary
Lok Nayak Bhawan,
New Delhi-110003
Tel: 24697124
(deals with Matters relating to Licensing of prohibited bores.Matters relating to management of Arms Acts)

penpusher

[mehulkamdar]

penpusher,

I am, very happily, an Indian citizen, and would like to take this route. But, would they send this information to the US on receipt of Rs 10? Or should I ask someone in India to get this info for me? Let me talk to someone in Chennai and find out if they could do the needful on my behalf.

I am very enthusiastic about this project as I have a solid backing from a very prominent body to help if it is permitted.

Thanks for the information. I was certain that if anyone knew what to do it would be you.

Cheers!

[art_collector]

Hi Mehul,

Well begun is half done. Wish u all the best 4 ur new venture.Look forward to seeing some decent air guns it town.

Since u looking at air guns try air pellets too. There is extreme shortage of good quality air pellets .177. U either get imported flat heads which are sold in the market for 300/- per tin or u have to compromise on the quality if u buy other pellets whish most shops sell. Dont know if air pellets too could be imported under OGL or they come under restricted category .

AC

[penpusher]

Mehul,

Would be happy to get the information for you.Would give me something to do.

penpusher

[Sujay]

Mehul,

I am searching for comprehensive information but did not post till date because I am not very sure of my findings as the GOI websites are like maze. However these are the broad details:-

1) The relevant industry to address this issue is Department of Industrial Policy and Promotion. Only proposals of 100% EOU and FDI are routed through the FIPB of Ministry of Finance. Ministry of Home gets involved only if its views are sought by another ministry.

2) Manufacturing of Airgun dosen't need a licence but this venture would need clearance of Foreign Investment Promotion Board And even if your venture is classified as FDI, FDI might be allowed as airgun manufacturing does not fall under any of the five industries requiring compulsory licencing. You can access the application here....

http://siadipp.nic.in/download/il-form.doc

3) If the initial investment is bought in foreign currency, repatriation won't be a problem ( searching for confirmation though).

4) Technology transfer would be applicable if you promote two companies; one of them in India. Most probably you might be doing it as an investment by NRI. Anyhow I do not think technology transfer is prohibited in any of the sectors ! ( ready to be corrected ).

5) It would be helpful for you to go through the NRI Ready Reckoner.

Sorry to be sketchy but this is all I could manage till now. I am trying to locate a person in the know and get back on this topic. Meanwhile you just hang out there and do not let this project fade away.

[mehulkamdar]

AC,

Thanks for the good wishes. I do hope that the project could be worked out. Let's see how it goes.

penpusher,

Thanks for this my friend. If we have this information, I guess, 90% of our work would be done.

Sujay,

Thanks for the information gathered. I am more than happy to persist on this if indeed something could be worked out. As far as funding is concerned, I have sources (not NRI but foreign) that are ready to finance the project. I also have some preliminary discussions with a leading European firm for the technology part.

I couldn't understand the bit about promoting two companies - I already have a business incorporated in the USA. Would this have to be linked with the air rifle project somehow? I'll check the links out though I am not sure that I have a good mind for legalese. Let me do the needful and find out if I could translate the stuff into plain English.

Best wishes, everyone!

[Sujay]

Mehul,

The issue of technology transfer would be applicable if a firm already incorporated in India enters into a venture with an overseas company and a fee is payable for technology transfer either as a lumpsum or in the form of royalty ; requiring RBI to step in. to my understanding, technology transfer is a non issue here. But from what you have written, it would need to be sorted out between the financiers in US and the European firm you are referring.

If funding is from overseas citizens, you can also take the 'Automatic Route' of FDI. I suggest you go through the application at least once to have a feel of the kind of information sought by the licencing authority.

Let's hope for the success of this one.

[art_collector]

Sujay,

U wud surely need a licence to manufacture air guns. I have seen a copy of a air gun manufacturers licence with a shop in delhi. However, they did not manufacture .It was granted by the DM, in early 60's. The condition of the licence does read that proper records would be maintained. Don't think the law would have changed .
For a few weeks there has been a shortage of National Air Rifles in the market as the air guns have not been coming from the factory. Most of the sellers have been saying that there is a strike at the IHP factory. But one of their distributors told me that its got something to do with their air guns manufacturing licence ? Don"t know who is correct.
But licence ofcourse is there.( correct me if I am wrong)

AC