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State-owned Ordnance Factory Board (OFB) is facing severe competition from the private sector to manufacture ammunition for the armed forces. Earlier, OFB was the only organisation that was permitted to produce ammunition, whereas the private sector could pitch in and manufacture parts of ammunition such as the shell or fuse.
With the Defence Ministry, under its ‘Make In India’ initiative, encouraging the private sector to manufacture ammunition, several corporates have stepped in. The aim is to reduce ammunition imports and procure all ammunition requirements from domestic sources.
To further encourage self-sufficiency in ammunition, the Ministry has issued multiple RFPs (request for proposal) in March 2017. Select domestic private firms were exhorted to participate in the RFP, which aims at supplying ammunition to the forces over the next decade.
Some of the private conglomerates that have evinced interest in the manufacture of ammunition are Reliance Defence, Kalyani Group and Godrej & Boyce. Smaller SMEs such as HYT Engineering, Premier Explosives and Continental Defence Solutions are also keen to participate in the tender.
Sources indicated that the combined value of the RFPs is ₹20,000 crore and the supply period is 10 years. The last date to submit the bid is August 7, and the bid opening date is August 8.
Baba Kalyani, Chairman, Bharat Forge, the flagship company of the Kalyani Group, is keen to grab a share of the $3- billion defence industry of artillery, armored vehicles, missiles and ammunition.
“Currently, the annual ammunition market size in India exceeds $1 billion, which is largely due to imports. We also tend to import nearly 60 per cent of our defence equipment, spending billions of dollars," Kalyani said.
More licences In order to ensure a much larger role for the private sector to address issues connected to ammunition shortages, the end of last year saw 14 private companies bagging licences by the Department of Industrial Policy and Promotion (DIPP) to manufacture ammunition.
L&T was among those which bagged the licence for assembly and testing of mortars, field guns, air defence guns, anti-tank weapon systems, and missiles.
Kinetic Kalyani Strategic System also got licences for ammunition and fuse setting devices, bombs, torpedoes, rockets, mines, missiles and depth charges.
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