55. Other requirements as to licenses granted in Form VII.
(1)The licensee shall preferably be self-sufficient in areas of product design and development and have maintenance and life cycle support facility of the product to be manufactured and the items to be manufactured shall meet the International or Indian accredited quality standards and norms with special emphasis on indigenous designing:Provided that no infringement of patents or copyrights, shall be permissible.(2)The licensee shall submit the standards and testing procedures for manufacture of firearms and ammunition to the Government nominated Quality Assurance Agency, which will inspect the finished product in the trial run and conduct audit of the Quality Assurance Procedures in respect of design, workmanship, aesthetics and other related parameters:Provided that the quality specifications for manufacturing, shall be as specified by the Bureau of Indian Standards (BIS) and the Director General of Quality Assurance, Department of Defense Production or any other international quality assurance agency.(3)The manufactured products shall contain the warranty clause accompanied by service and safety manuals and listing of parts at the time of every sale.(4)Any restrictions under a joint venture agreement which may be imposed by the foreign partner shall have no legal consequence on the Indian entity that is granted a license under these rules.(5)The licensing authority may impose such additional restrictions in case of certain sensitive type of arms and ammunition, such as those configured for use by armed forces or not permitted to be possessed by civilians.(6)[ The small arms and light weapons produced by the manufacturers may be allowed for export subject to the approval of the Ministry of Home Affairs in consultation with the Ministry of External Affairs, the Ministry of Defence and the Ministry of Commerce, on a case to case basis.;] [Substituted by Notification No. G.S.R 1342(E), dated 27.10.2017 (w.e.f. 15.7.2016).](7)The permissible category of arms and ammunition specified in Schedule I may be permitted for sale to persons or dealers, holding a valid arms license under these rules, with the prior approval of the Central Government in the Ministry of Home Affairs.(8)Prior approval of the licensing authority shall be mandatory for any change in the directorship of the company or any change in the key managerial personnel as defined in clause (51) of section 2 of the Companies Act, 2013 (18 of 2013) or any change in the responsible person of the company.(9)Prior approval of the licensing authority shall be mandatory for any change in control or ownership, either directly or indirectly, of the company or any change in shareholding resulting into dilution of promoters shareholding (both Indian and foreign) or any change in shareholding of the company or any change in the beneficial interest in the shareholding of the company beyond five percent (5%).(10)(a)A license granted in Form VII shall not be transferable from the licensee to another company, without the written authorization of the licensing authority.(b)An application for transfer shall be accompanied by complete documents and be subject to the same conditions as applicable at the time of initial grant of license specified in rule 53.(c)While considering an application for transfer of a manufacturing license, the licensing authority shall assess the eligibility of the company, to whom the license is to be transferred.(11)[ A licensee company having a licence in Form VII shall be permitted to have enhanced annual production of firearms and/or ammunition upto fifteen per cent. of the quantity endorsed on his licence, by giving prior intimation to the licensing authority for which no further endorsement on the licence as to capacity shall be required.;] [Inserted by Notification No. G.S.R. 1342(E), dated 27.10.2017 (w.e.f. 15.7.2016).]
