Tata Power, through its Strategic Electronics Division, will design, develop, manufacture and assemble various upgrades of defence systems in Bangalore.
"The government has given seven specific licences for defence production. This is almost a comprehensive licence for Tata Power," defence ministry officials said. A Tata Power executive confirmed the development.
Industry analysts said the company would become a key private player in defence production, providing competition to other industry participants like Larsen & Toubro, Mahindra & Mahindra, Kirloskar Brothers, Ashok Leyland, Jindal, Max Aerospace & Aviation and Ramoss India.
With the licence, the Strategic Electronics Division, which is recognised by the ministry of defence as a major centre for programmes on electronic warfare, naval combat and air defence, can upgrade electronic warfare systems of the Indian Army, Indian Navy, Indian Air Force, and paramilitary forces.
Besides network-centric warfare enablers, Tata Power can manufacture upgrades of weapon systems like rocket and missile launchers for ground and naval applications.
The industrial licence covers air defence guns, field artillery, naval guns, tanks, naval combat systems, and military-grade products such as consoles and rugged computers.
In 2004-05, the SED had developed Pinaka, a multi-barrel rocket launcher, and Samyuktha, an integrated electronic warfare system, which was supplied for induction by the Indian Army. The company also received orders for weapon launchers from the Army and Indian Air Force.
Sources close to the development said the Tata group had registered revenues of around Rs 1,100 crore from the defence sector in 2006.
Apart from SED, other group companies such as TCS, Tata BP Solar, VSNL, Tata Infotech, Tata Advanced Materials, and CMC are contributing to defence production.