Both private and public sectors together can address India’s dismal ammunition requirement
Carefully balancing the potential of India’s domestic private industry with the necessity of ordnance factories (OFs) and DPSUs in meeting country’s ammunition needs, defence minister Nirmala Sitharaman at a recent conference underscored the importance of both private and public sector to achieve self-reliance in defence production with the rider that the latter needed to be ‘revitalised’.
Organised jointly by Federation of Indian Chambers of Commerce and Industry (FICCI) and CENJOWS (Centre for Joint Warfare Studies) from March 12-13, ‘Ammo India 2018’, once again brought home the painful truth that Indian armed forces’ ammunition woes continue despite frequent flagging-off of the issue at multiple foras, including the Parliamentary Standing Committee on Defence.
Conscious of this fact, Sitharaman said, “The management of these organisations (OFs and DPSUs) need to be ahead of the curve and show dynamism,” as they possess immense and valuable assets that could offer manufacturers huge production opportunities. She added that the defence ministry was encouraged by the quantum of outsourced component in defence manufacturing which had risen to 29 per cent in fiscal 2016-17.
This, she said, displayed that Tier 1 Indian companies were up to their task and also serve as an assurance to SMEs that their products would be sourced by big companies. It was encouraging that SMEs had started to bring in start-ups to produce for the armed forces and her ministry was coordinating between the Department of Industrial Policy and Promotion (DIPP) and the home ministry. This should give comfort to original equipment manufacturers (OEMs) that different arms of the government were engaged in a well-oiled effort and under the ‘Make II’ initiative, procedures had been simplified and once a prototype was developed and tried out, manufacturers should not worry about orders as these would be forthcoming.
The private defence industry is still awaiting the fruits of the ‘Make in India’ and ‘Strategic Partnership’ policy even as the request for proposal (RFP) for manufacturing eight out of 82 types of ammunition issued in March 2017 hangs in limbo while the remaining manufacturing orders are reserved for the Ordnance Factory Board (OFB). Thirty-seven private companies with defence production licences are aiming to bid for 21 different types of ammunition.
To overcome this shortage, the government had approved a long-term contract of 10 years with the selected ammunition manufacturers to facilitate a viable commercial model. The eight RFPs include procurement of medium and large calibre ammunition such as 23mm HEI/APIT for the ZU/ Strella air defence gun systems to 125mm FSAPDS for the T90/T72 tanks. Over the years, ammunition procurement has been done by placing five-year ‘roll on indent’ on OFB keeping in mind capacity and production while remaining ammunition is imported. From 2008-2013, no procurement of ammunition took place against the nine items that were initiated by the government because of single vendor issues, complexities in transfer of technology (ToT), delay in GSQR, and more. A repeat of history is now appearing on the horizon.
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