Foreign acquisitions despite local capacity undermine sector, says letter to Rajnath

NEW DELHI: With Army taking a decision to order another 72,400 assault rifles from Sig Sauer of the U.S., domestic small arms manufacturers have expressed concern over continuing imports, with one of them writing to Defence Minister Rajnath Singh asking for a level playing field to showcase their products.

“There are Indian companies which can now make small arms with over 50% indigenous content and we can match the price and timelines. What we are asking is to give domestic companies the same level playing field as foreign companies and support Make in India,” an official from a private manufacturer said on condition of anonymity.

Letters voicing these concerns have been written to Mr. Singh at least twice in the past it has been learnt.

The official said Indian companies are not considered for deals through Fast Track Procurement (FTP), which is limited to foreign vendors currently. Their case can also be taken up as suo moto case under the procurement process, he stated.

Under a ₹700 crore deal in February 2019 with Sig Sauer of the U.S., the Defence Ministry procured 72,400 SIG-716 assault rifles through FTP, most of which which were for the Army and have been provided to frontline troops involved in counter insurgency operations.

The remaining demand of over 7 lakh rifles was to be met through the licensed manufacture of Russian AK-203 rifles in India through a joint venture with the Ordnance Factory Board (OFB). However, the final deal has been stuck over the issue of pricing.

Last week, Army sources said they took an in-principle decision to place a repeat order for SIG-716 rifles and the case is being processed. Similarly, a case for over 90,000 Close Quarter Carbines (CQB) again through the FTP route has also been stuck. For sometime the Army has been attempting to replace the indigenous INSAS (Indian National Small Arms System) rifles with a modern rifle.

In the last few years, several Indian companies have invested in the small arms segment, given the large requirement and efforts by government to open up ammunition to the private sector and have started production as well. One such is PLR systems, formerly with Punj Lyod, which in collaboration with Israel Weapon Industries (IWI) in 2017 set up India’s first private sector. small arms manufacturing plant at Malanpur in Madhya Pradesh. Similarly, Bharat Forge, Jindal defence systems limited and SSS Defence have developed products on their own with collaborations, which were on display during DefExpo in Lucknow early this year.

However, without any major order from the armed forces, many companies are looking for smaller orders from police and Central Armed Police Forces (CAPF).

“It is not that we are waiting for orders to set up facilities but many of us have the facilities in production and ready to deliver,” another official from a manufacturer said. “If the industry is not given a chance, it will only undermine the Make in India initiative,” he added.