Units other than small scale units are permitted to expand or create new capacities in respect of items reserved for the small scale sector, subject to the condition that they obtain an Industrial licence under the Industries (Development and Regulation), Act, 1951. It is a condition of such licences that the manufacturer shall undertake export obligation as may be specified by the Ministry of Industry and the licensee is required to furnish a Legal Undertaking to the Directorate General of Foreign Trade in this behalf. The export obligation shall be monitored by the Directorate General of Foreign Trade.

(Above para has been amended vide P.N.No.33/(RE-98), Dt. 27/8/98)