UAE's state-owned arms manufacturer firm keen to set up facilities

The deal for 93,895 Close Quarter Carbines (CQBs) for the Indian Army, for which United Arab Emirates (UAE)’s government-owned small arms manufacturer Caracal was shortlisted, is like a “benchmark” for UAE industry and they are watching closely on further investments in the Indian market, said Hamad Salem Alameri, Chief Executive Officer (CEO) of Caracal in an interview to The Hindu.

“Once this first contract moves, lot of sister companies within the group will see this as a success story and people will have the confidence to come and invest in India,” Mr. Alameri said. He said this was the most important message that everyone is looking at and people are willing to come and invest in India and create jobs with the blessings of the two governments.

However, while Caracal was shortlisted two years back, the final deal has been delayed and recently an in-principle decision was taken in the Defence Ministry to cancel the deal and take the domestic route for procurement. But no formal announcement has been made so far.

“Nothing came to us officially on the cancellation or on the intent of cancellation,” Mr. Alameri said.

He said in the last two years Caracal had developed lot of suppliers and technology partners and the starting point of indigenisation will be 60%. Stating that Caracal has already identified four locations to set up the facility and also identified local partners to be able to commence production immediately, Mr. Alameri said India is already part of their global supply chain and over 20% of the components fitted on the CAR 816 are already made in India.

The deals for 72,400 assault rifles and 93,895 carbines were approved by the Defence Acquisition Council (DAC) in January 2018 to be processed through the Fast Track Procurement (FTP) route. While the deal for assault rifles was concluded with Sig Saur and SIG-716 assault rifles delivered to the Army, the CQB deal in which Caracal was selected has been held up. The total number CQBs required is much larger given the Army’s requirement.

Caracal was among two of five contenders who qualified in the trials, from which it was declared the lowest bidder as its bid was $26 million less than the competitor, Mr. Alameri said. As part of the evaluation, an Army team conducted trials at the vendors’ facilities and later the carbines were tested in India with local ammunition to check compatibility.

Caracal which is looking to expand its presence in the Indian market, is now bidding for the Sniper rifles tender of the Army and also looking to supply sub-machine guns to the Home Ministry, Mr. Alameri added.

The CAR-816 carbines meant to replace the Army’s 9mm Sterling carbines in service and have higher bullet velocity and reduced weight compared to the Sterling carbines. Caracal has already said it is positioned to complete the order within 12 months.