Defence minister Nirmala Sitharaman On Monday is expected to meet and address the issues faced by the private Indian industry in manufacturing of military ammunition.
Ammunition manufacturing in India, which until 2016 was open only to the privileged few including the Ordnance Factory Board (OFB) and Defence Public Sector Undertakings (DPSU), was opened up by the government to the private sector under its Make in India initiative for defence.
The RM will address the industry at an International Conference on Military Ammunition: Make in India Opportunities and Challenges to be held on March 12 in the capital.
The Federation of Indian Chamber of Commerce and Industry (FICCI) in association with Centre for Joint Warfare Studies (CENJOWS) are holding this conference titled—“AMMO INDIA 2018.”
Speaking to DefenceAviationPost.com, Lt Gen Vinod Bhatia, PVSM, AVSM, SM, (Retd), Director CENJOWS said one of the objective of this conference is to give a holistic overview of the opportunities for industry in Ammunition requirements. Besides, the meet also aims to familiarise the industry with policy and regulatory issues associated with the manufacturing of Ammunition.
It may be noted here that since the opening of ammunition manufacturing to the private industry, the Ministry of Defence (MoD) under the Arms Rules 2016 has been encouraging the industry to engage in the manufacture of ammunition that offers tremendous opportunities for the industry to meet the ammunition requirements of our nation.
On its part, the Indian private Industry is keen to leverage the opportunity and establish capacities & the capabilities for indigenous ammunition manufacture.
Currently, the annual ammunition market size in India exceeds USD 1 billion and there is scope of additional annual capacity of approximately USD 250 million in private sector.
Besides, domestic market there is a huge export potential.
Subsequently in 2017 the Arms Rules were amended again to boost the ‘Make in India’ manufacturing initiative. These changes have been discussed under the section Policy and Procedures.
A significant number of RFIs and RFPs issued by the MoD in the last few years for manufacturing of arms and ammunition to the Indian private companies.
The largest procurement initiatives in Arms and Ammunition was launched by the MoD in 2017, when they released 8 RFPs for procurement of medium and large calibre ammunition from the Indian private industry.
The requirement for ammunition ranges from 23mm HEI/APIT for the ZU/ Strella air defence gun systems to 125mm FSAPDS for the T90/T72 tanks.
In pursuance of the government policy, the Indian Army had issued Request for Proposals (RFP) to manufacture variety of ammunition at an estimated value of USD 3 billion in the next five to eight years.
* 20,000 units of 125 mm ammunition for T-90 and T-72 tanks
* 500,000 units of 23 mm ammunition for Strella air defense systems
* 300,000 units of 40 mm ammunition for grenade launchers
* 500,000 units of 40 mm ammunition for multi-grenade launchers
* 5,000 units of ammunition for Grad multi-barrel rocket launchers
* 600,000 fuses for 155 mm M-46 howitzers
* 188,600 units of 30 mm ammunition for the BMP armored vehicles and 100,000 units of ammunition for 155 mm FH77/B howitzers
Ammunition is also one of the shortlisted categories for Strategic Partnership. A minimum 10-year order book should help in the creation of a viable business plan, and the necessary investment.
The present policy of ammunition manufacture juxtaposed with the volumes provides unique opportunities to the Private industry to develop the capacity and capability and engage in Joint Ventures with foreign OEMs.
As such, several overseas defence companies, are already negotiating with private Indian companies to provide cutting-edge technology for manufacture of multiple ammunition programs.
Recommendations From Tge Industry:
- Reduce procurement lead times: Multiple RFIs and RFPs have been issued in the past with no result in the arms and ammunition category.
- RFP must outline complete roadmap: It would not suffice to simply issue RFPs exclusive to private industry. Complete roadmap for an ammunition RFP should be outlined, one with hand-holding and guidance to the private industry from the GoI, (including agencies like the DGQA, the end user and DRDO).
- Long-term covenant should be part of any proposal for ammunition manufacturing, once you place an order on a company then for next 10 years they would be the source for that product (in order to get ROI on infrastructure investment).
- Licencing process should be streamlined:
o DIPP has an online process now but MHA (which issues licence for small arms and ammunition) is an offline process.
o Documents required need to be clearly stated, since the documents stated on the site and forms do not seem to suffice.
- Establish an Ombudsman for Industrial Licence: Regular feedback mechanism and intimation to the industry on details lacking in their application and well as status..
Lack of design and R&D within the private sector, still leaves us dependent on foreign OEMs for ToT. Not-withstanding the fact that this sector was not open to the private industry, there needs to be more than just intent from the companies to fructify arms and ammunition manufacturing and address the needs of the Armed Forces.