Defence Technology

India’s defence technology sector stands as a cornerstone of national security, fostering innovation, research, and technological advancements. However, companies operating in this domain face stringent legal and regulatory frameworks, complex compliance requirements, and potential exposure to white-collar criminal liability. At Duke & Baron, our team of practising criminal advocates, corporate advocates, in-house counsels, and company secretaries, in collaboration with taxation experts, business strategists, and stock market specialists, ensures comprehensive legal support. We navigate the intricate legal landscape to help businesses in defence technology remain compliant, mitigate risks, and protect their interests.

Primary Legal & Compliance Challenges

1. Licensing & Regulatory Approvals

• Companies must obtain mandatory approvals from the Ministry of Defence (MoD), Defence Research and Development Organisation (DRDO), and Department for Promotion of Industry and Internal Trade (DPIIT).
• Compliance with the Defence Procurement Procedure (DPP), 2016 and Defence Acquisition Procedure (DAP), 2020 is crucial for contract execution.
• Adherence to Export Control Laws such as the Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) list under the Foreign Trade Policy (FTP), 2015-2020 is essential for defence exports.
• Businesses must comply with the Arms Act, 1959, and Arms Rules, 2016, governing the manufacture, sale, and transport of arms and ammunition.

2. Foreign Direct Investment (FDI) & Joint Ventures

• The Foreign Exchange Management Act (FEMA), 1999, and Consolidated FDI Policy, 2020, govern FDI in the defence sector, allowing 74% under the automatic route and beyond 74% under the government approval route.
• Offset obligations under defence contracts require compliance with the Indian Offset Partner (IOP) norms and Defence Offset Guidelines.

3. Intellectual Property Rights (IPR) Protection

• Defence technologies involve proprietary inventions that require robust patent protection under the Patents Act, 1970, trade secret management, and technology transfer agreements.
• Cybersecurity and data protection laws mandate companies to safeguard sensitive military data from cyber threats and espionage under the Information Technology (IT) Act, 2000, and associated rules.

4. Compliance with Defence Industrial Security Regulations

• Companies must adhere to the Industrial Security Guidelines issued by the Ministry of Defence (MoD).
• Compliance with the Official Secrets Act, 1923, is crucial to avoid legal repercussions for unauthorized disclosure of classified information.
• Companies must implement Cybersecurity Frameworks under the National Cyber Security Policy, 2013, and comply with Computer Emergency Response Team – India (CERT-In) Guidelines.

5. Taxation & Financial Compliance

• Defence companies must comply with Goods and Services Tax (GST) laws, customs duty exemptions, and Special Economic Zone (SEZ) regulations.
• Proper financial disclosures are required under the Companies Act, 2013, and the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements (LODR), 2015 for listed entities.

White-Collar Criminal Trials & Potential Legal Risks

Companies in the defence sector are particularly susceptible to white-collar criminal liabilities, including:

1. Corruption & Bribery Cases

• The Prevention of Corruption Act (PCA), 1988 (as amended in 2018) imposes strict liability on companies and individuals involved in bribery or illicit transactions in defence procurement.

2. Fraud & Misrepresentation

• Cases under Sections 316-320 of the Bharatiya Nyaya Sanhita (BNS), 2023, covering fraudulent misrepresentation in defence contracts.
• Financial fraud, including money laundering, is governed by the Prevention of Money Laundering Act (PMLA), 2002.

3. Espionage & Unauthorised Information Sharing

• Companies and individuals may face prosecution under the Official Secrets Act, 1923, for unauthorized access or transmission of sensitive military data.

4. Cartelization & Anti-Competitive Practices

• The Competition Commission of India (CCI) monitors anti-competitive agreements and bid-rigging under the Competition Act, 2002.

5. Environmental & Safety Violations

• Defence manufacturing companies must comply with the Environmental Protection Act, 1986, and avoid legal action under hazardous waste management regulations.

How We Can Assist

At Duke & Baron, we offer comprehensive legal solutions tailored to the unique challenges of the defence technology industry. Our firm provides:

1. Legal & Secretarial Compliance Services

• Assistance in obtaining necessary licences and approvals from government authorities.
• Ensuring adherence to defence procurement procedures and regulatory frameworks.
• Drafting and reviewing contracts, joint venture agreements, and offset policies.
• Advising on FDI structuring, technology transfer agreements, and compliance with investment regulations.

2. Corporate Governance & Risk Management

• Establishing internal compliance mechanisms to mitigate risks.
• Providing training on anti-corruption laws, cybersecurity, and industrial security protocols.
• Assisting with due diligence in mergers, acquisitions, and joint ventures.

3. Representation in Judicial & Quasi-Judicial Proceedings

(a) Criminal Trials

• Defending companies and executives in corruption, fraud, money laundering, and corporate espionage cases.
• Representing clients before the Central Bureau of Investigation (CBI), Enforcement Directorate (ED), Serious Fraud Investigation Office (SFIO), and other regulatory bodies.

(b) Commercial Suits & Tort Cases

• Handling disputes related to intellectual property theft and trade secret misappropriation.
• Representing clients in contract enforcement cases and arbitration under the Arbitration and Conciliation Act, 1996.

(c) Compliance Regulatory Investigations

• Representing clients before SEBI, CCI, Directorate General of Foreign Trade (DGFT), and National Green Tribunal (NGT) for compliance violations.
• Handling environmental litigation and regulatory compliance disputes.

The defence technology sector in India is a highly regulated and sensitive industry, necessitating meticulous legal and compliance strategies. At Duke & Baron, our team of expert criminal advocates, corporate lawyers, in-house counsels, and company secretaries provides tailored legal solutions to mitigate risks, ensure compliance, and safeguard the interests of businesses operating in this domain. Whether it involves securing regulatory approvals, defending against white-collar criminal charges, or representing clients in court, we stand as a formidable legal partner, ensuring that our clients navigate the complexities of the defence industry with confidence and compliance.

For strategic legal counsel and robust representation, Duke & Baron is your trusted partner in the ever-evolving landscape of India’s defence technology sector.