Hinduja Group’s request to enter defence sector via Gulf Oil turned down

NEW DELHI: A bid by the Hinduja group to enter the lucrative defence manufacturing sector has hit a roadblock with an industrial licence application by its Gulf Oil Corp Ltd ( GOCL) unit being rejected by the government.

GOCL, which had applied in August 2015 for licences to manufacture a range of defence-related products including grenades, detonators and ammunition was rejected by the Department of Industrial Policy and Promotion earlier this month, even as applications by several other companies filed at the same time were approved.

The reason for the rejection isn’t immediately clear, but the objection to setting up of an ammunition and explosives manufacturing facility by the Hinduja group company has come from the home ministry.

Incidentally, the defence ministry had given a positive recommendation for the proposal that projected an initial investment of Rs 110 crore and jobs to 360 people in Hyderabad.

Government documents accessed by ET showed that the company had applied for a total of nine items to be produced at the facility, including 30 lakh grenades a year and over 10 lakh units of ammunition. While the Department of Defence Production gave a go-ahead in October 2015, two months after the application was put up, the Ministry of Home Affairs sent out a “not recommended” note in November last year, the documents revealed.

Gulf Oil Corp Ltd said it has not yet been intimated about the rejection.

“Without seeing the official intimation, it’s inappropriate for us to comment. However, the necessary clarifications and representations will be provided to follow up the application in view of the fact that GOCL has been in the energetics and industrial explosives business for over five decades,” a GOCL spokesperson said in response to a questionnaire sent by ET.