CENJOWS

KNOWLEDGE REPORT

Knowledge Partner

Military Ammunition
Make in India - Opportunities and Challenges
CENJOWS

KNOWLEDGE REPORT

Knowledge Partner

Military Ammunition
Make in India - Opportunities and Challenges
Foreword
urgent requirements. This paradigm was not
sustainable as it left the country dependent on
external sources of supply. The current conflict
between Russia and Ukraine has brought to
the fore the fault-lines of being over-
dependent on other countries for critical items
like ammunition. Thus, there is an urgent need
for India to enhance its production capacity
and R&D capability. The development of this
sector will meet the current demand-supply
gap in critical equipment and also go a long

T
owards ensuring that India becomes way in reducing our reliance on import. So, this
well-prepared to meet the challenges area holds immense opportunities for the
and threats posed by Covid-like private sector. We are happy that it is being
pandemic or any other major disruptions in progressively encouraged and promoted by
supply chain, the Government of India has the supportive and forward-looking policies
initiated various significant measures. During enacted by the Ministry of Defence under the
the last couple of years several key schemes leadership of the Hon'ble Raksha Mantri Shri
were announced and implemented to Rajnath Singh.
kickstart the revival of the economy and boost FICCI in association with the Centre for Joint
the degree of 'Atmanirbharta' in our economic Warfare Studies (CENJOWS) launched "AMMO
landscape including the defence sector. As a India" Conference on Military Ammunition in
part of these initiatives, three positive 2018. The first of its kind in India, the
indigenization lists were announced. The first programme was highly appreciated and
list of indigenization included 17 items related benefitted the industry including the end-
to ammunition and artillery. users. For "AMMO India 2022", we have
Historically the bulk of the requirements of expanded the scope of the conference to
ammunition for our armed forces and Central cover the extensive range of ammunition
Armed Police Forces (CAPFs) was catered to by requirements of the entire armed forces - the
the erstwhile Ordinance Factory Board (OFB) Indian Army, Air Force and Navy. I am
and Defence Public Sector Units (DPSUs). confident it will offer a unique platform for all
However, imports of these critical items were stakeholders i.e. Industry, Users, DRDO and
necessitated in times of conflict to meet Academia to meet and work towards
achieving greater self-reliance in Ammunition of the Indian Ammunition and Munition
manufacturing and moving towards sectors. It also proposes the way ahead to
Atmanirbhar Bharat in the Defence sector. further enable the industry on our path to
Atmanirbhar Raksha Utpadan! I hope the
This report is a follow-up to our knowledge
concerned stakeholders will find it a good
paper released in 2018 on 'Ammunition
read!
manufacturing in India', and covers the
developments in the policy and market space I wish AMMO India 2022 a great success.

Arun Chawla
Director General
FICCI
Foreword
Over 250,000 rounds are believed to have
been fired in a limited conflict, over two months.
The Armed Forces are reportedly mandated to
maintain War Wastage Reserves of 40 days of
"intense conflict" ie 40(I). Post the Pakistan
sponsored terror strikes at Uri (2016),
procurements under emergency powers were
undertaken to bring critical stocks to 10(I).
Pakistan sponsored terror attack at Pulwama
(2019) and the ongoing stand-off in Eastern
Ladakh since May 2020, impelled repeated
emergency procurements between 2019-

W
e have come a long way since the 2021 to enhance the stock levels. Regrettably,
British set up a gun powder CAG reports have repeatedly lamented
factory in 1787. Through the wars slippages in supplies and voids in the
of the 20th Century, a growing cluster of inventory, besides poor quality checks at the
ordnance factories, the sole public sector manufacturing stage. The Russian army is
providers of munitions, remained the reportedly firing over 20000 artillery shells
mainstay of British and Indian armed forces. every day, as compared to 6000 shells by
Over time, however, challenges of varied non- Ukraine. Dumb munitions have assumed
indigenous weapons, compounded by the primacy after guided and smart munition
volumes, modernisation, efficiency and stocks have likely become critical. These trends
capacity, eventually led to structural reforms are instructive while scaling our reserve stocks,
that saw the amalgamation of clusters of maintenance and surge capacities.
Ordnance Factories into new DPSUs including The other challenge is of technology,
Munitions India Limited (MIL) and Yantra India modernisation and import dependence.
Limited (YIL) in Oct 2021, and policy reforms Kinetic application of force will remain the
that incentivise ATMANIRBHARTA through a decisive deterrent and war-winning factor for
growing role of the Indian private sector to countries like India, beset with border disputes
address the modernisation and capacity and conflicts since independence, which defy an
deficits. How do we ensure that these early resolution. Several specialised munitions
transformative changes deliver the desired like anti-tank, air-to-surface, air-to-air and
outcomes? surface-to-air, loitering, GPS guided artillery
We face a challenge of capacity. Victory in the shells, rockets, MANPADS and grenades have
Kargil conflict was scripted in no small been imported post 2016. The conflict in
measure by firing over 5000 artillery, mortar Nagorno-Karabakh in 2020 saw extensive use
and rocket rounds daily. Tiger Hill was captured of modern loitering munitions and guided
with over 9000 rounds fired on that fateful day! rockets. Precision, thermobaric and
hypersonic weapons are being used by Russia cases could potentially trigger the
in Ukraine. Battlefields of tomorrow will see transformative inflection. The three positive
intelligent, multiple sensor-fused munitions lists, issued between 2020-2022, progressively
being used in all domains, leveraging preclude import of a plethora of guided
technologies to hit targets with ever munitions, range extension kits, mines, course
increasing precision, reach, lethality and correcting fuzes, cruise, anti-ship & anti-
discrimination, with embedded algorithms to radiation missiles and loitering munitions.
augment human decision making. Harnessing With clear and firm requirements known for
these technologies, where the private the next 10 years, the opportunity for both the
industry can play a big role, will govern the Private Industry and invigorated DPSUs, is
exploitation of these game changing indeed unique and unprecedented.
munitions in the future conflicts.
AMMO India 2022, co-hosted by FICCI &
The key to ATMANIRBHARTA, clearly lies in CENJOWS, provides the right platform to all
policy implementation. Though the Arms key stakeholders to work together with
Rules, licensing & FDI policies and acquisition renewed zest and synergy to make "Make-In-
procedures have been revamped between India" in munitions a reality. Presence and
2016 to 2020 to incentivise active participation visionary thoughts of Hon'ble Raksha Mantri
of the Private Industry, re-tendering of cases and the support of the MoD, DDP, HQ IDS, the
since 2017 has been a dampener. Recent three Services, DRDO and Captains of the
initiation of several Make-In-India and Make-II industry will help this event catalyse the drive
towards ATMANIRBHARTA in munitions.

Lieutenant General
Sunil Srivastava, AVSM, VSM** (Retd)
Director, CENJOWS
Contents
1. Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Global Demand for Ammunition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Impact of Ukraine War . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3. Implications for India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1. DAP 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2. Defence Procurement Manual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3. Industrial Licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3.1. Procedure to Obtain IL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Ammunition Procurement in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1. RFI/RFPs for Ammunition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2. Positive Indigenisation List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3. Make Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.4 End-User Perspective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5 Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4. DPSUs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.1. Munitions India Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.2. Yantra India Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3. Bharat Dynamics Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.4. Bharat Electronics Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5. DRDO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.1. Ammunition Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2. Transfer of Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6. Role of Private Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.1. Key players in Private Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2. Foreign Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7. Way Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1 Recommendations from the Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1.1. Ministry of Defence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1.2. Industrial Licence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1.3. Export / Import Licence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1.4. Technological. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1.5. Ammunition Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
About Sugosha Advisory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
 1 Overview

1.1. Global Demand for Ammunition

The global ammunition market size was valued at USD 22.35 billion in 2021 and is expected to
expand at a compound annual growth rate (CAGR) of 3.2% from 2022 to 2030. Which would
mean a market size of close to USD 30 billion by 2030.1 A rise in the number of geopolitical
conflicts, internal conflicts and hostilities across the globe is likely to increase the procurement of
defence equipment by prominent militaries across the globe, which will further drive the market
for ammunition.

The small calibre segment led the market and accounted for over 50.0% share of the global
revenue in 2021. This trend is attributed to a wide array of small-calibre ammunition applications
2
including shotgun pistols, assault rifles, rifles, and revolvers.

1.2. Impact of Ukraine War

It has been more than 150 days since Russia's invasion on Ukraine. What initially seemed like a
swift war which might get resolved with talks, is now a near intense long drawn war. None had
envisaged a war of this scale in this day and age when there are swift battles and close quarter
exchange of firepower. The Ukraine crisis has forced many governments into thinking more
critically about their Defence strategies on long-term warfare.

It is being reported that Ukraine is losing the frontline war and is heavily dependent on the West
for supply of weapons and ammunition if they are to sustain any further. It appears to be
predominantly an artillery war, with both sides continuing their strikes. Ukraine is said to be using
5000-6000 artillery rounds a day. Having used up most of their stock ammunition, they have
moved to 155mm NATO standard shells3 . They are running out of ammunition stocks as European
manufactures are not able to match the demand. Based on this, one can make a rough estimation
of the kind of demand for ammunition in such intense war scenarios. This will also put most
Armies into thinking about their stock keeping strategies and fulfilling demand during a war
situation.

¹ Market research report from Grand View Research

² Market research report from Grand View Research
³ The Guardian

1
 1.3. Implications for India
While the ammunition industry is seeing greater activity due to the current conflict in Ukraine,
India has and always will be facing challenges at its northern and western borders. Both China
and Pakistan are a constant threat and we have witnessed multiple escalations in the recent past.
There has always been a possibility of a two-front war.

Ammuni on stocks in the Armed Forces are based on the concept of Minimum Acceptable Risk
Level (MARL). This is the minimum level of ammuni on to be stocked to sustain intense war for 20
days. The number of days has been under debate and changed as per the situa ons. Un l 2017, the
CAG reports which were made public, stated several shortages in ammuni on stocks of various
calibres. Since we are not privy to the reports anymore, it would be for the Ministry of Defence and
Indian Armed Forces to analyse the data and formulate an appropriate stock keeping strategy.

Historically we have had the Ordnance Factories and Public sector manufacture ammunition for
the armed forces. This will not be enough with the current scenario and a sight on the future. India
must enhance the ammunition technology R&D as well as design & development by industry,
which would ultimately result in production capacities within India. The indigenous ammunition
programs identified by the forces must be progressed at a faster pace to meet existing and future
demands.

2
 2 Policy

2.1. DAP 2020

The Defence Procurement Procedure (DPP) (Renamed Defence Acquisition Procedure - DAP in
2020) is a set of guidelines approved by the Defence Acquisition Council (DAC) that govern
capital procurements in terms of Defence equipment, manufacturing capabilities and
technology. It provides framework and criteria for allotment of Defence contracts. The first DPP
was formulated in 1992 but came into effect only in 2002. Since then, it has been revised in 2005,
2006, 2008, 2009, 2011, 2013, 2016 and 2020.

DAP 2020, a product of extensive analysis, deliberations, interactions and focused formulations,
aims to further 'Self Reliance' of the country in the Defence sector and implement 'Ease of Doing
Business' with emphasis on Simplification, Delegation, Reduced Timelines and making the
process as Industry friendly as possible. The following chapters have been introduced in DAP
2020,

Chapter IV - Procedure for Acquisition of systems designed and developed by

DRDO/DPSU/OFB

Chapter VIII - Acquisition of Systems Products and ICT Systems

Chapter IX - Leasing

Chapter X - Other Capital Procurement Procedure

Chapter XI - Post Contract Management

Reservation in Categories for Indian Vendors. The categories of Buy (Indian-IDDM), Make I,
Make II, Production Agency in Design & Development, OFB/DPSU and SP model will be
exclusively reserved for Indian Vendors meeting the criteria of Ownership and Control by resident
Indian Citizens with FDI not more than 49%. This reservation will provide exclusivity in
participation to domestic Indian industry.

3
 Procurement Categories
In decreasing order of priority, the priority of procurement categories are as follows: -

Priority Category Buy From Qualification IC %

1 Buy (Indian- Indian Indigenously designed, 50%
IDDM) Vendor developed and manufactured

2 Buy (Indian) Indian Manufactured in India (not Indigenous design -

Vendor designed and developed Min 50%, otherwise -
indigenously) Min 60%
3 Buy & Make Indian Initial procurement from Min 50% of MAKE
(Indian) Vendor FOEM followed by phased
production in India with ToT
from FOEM
4 Buy (Global FOEM Outright purchase from Min 50%
– Mfr in FOEM followed by
India) indigenous manufacturing in
India
5 Buy (Global) FOEM or Outright purchase from Min 30% for Indian
Indian FOEM or through Indian Vendor
Vendor Vendor

2.2. Defence Procurement Manual

The Defence Procurement Manual 2009 (DPM 2009) contains principles and procedure relating
to procurement of goods and services for the Defence Services, Organizations and
Establishments falling under Revenue Expenditure. The term procurement means acquiring all
types of goods (both scaled and non-scaled), such as equipment, stores, spares, technical
literature, etc., as well as all types of services, including packing, unpacking, preservation,
transportation, insurance, delivery, special services, leasing, technical assessment, consultancy,
systems study, software development, maintenance, updates, conservancy, etc. implies
procurement of items and equipment, including replacement equipment (functionally similar)
assemblies/sub-assemblies and components, to maintain and operate already sanctioned assets
in the service, the necessity of which has been established and accepted by the Government.

Revenue Procurement : Implies procurement of items and equipment, including replacement

equipment (functionally similar) assemblies/sub-assemblies and components, to maintain and
operate already sanctioned assets in the service, the necessity of which has been established and
accepted by the Government.

4
Channels of procurement – by placing demand on

  The Director General of Ordnance Factories

  Other ministries of government and state governments

  Industries/Factories/Statutory Corporations (partially or wholly owned by govt)

  Indigenous trade either directly or through the Director General of Supplies

  Local Purchase in respect of items which are not supplied by the central procurement
authority/ organizations of the Services / Departments and stores emergently required

  Defence Public Sector Undertakings and other Government Public Sector Undertakings

The updated draft of Defence Procurement Manual 2021 was released on 25th Mar 2021. It has
taken 11 years to get a new version of the DPM, which is still in the draft stage. There have been
some noteworthy amendments in the 2021 version with regards to Indigenous Procurement,
Goods & Services, Information & Communication Technologies, and Consultancy. Industry looks
forward to see DPM 2021 become official at the earliest.

2.3. Industrial Licence

Manufacturing in the Defence sector is governed through industrial licensing under The
Industries (Development and Regulation) Act, 1951. Before 2001, manufacturing in Defence
sector was limited to public sector companies (OFB & DPSUs). However, in 2001, the Government
allowed 100% Indian private sector participation in Defence manufacturing sector subject to
licensing under IDR Act.

Governing Industries (Development and Regulations) Act 1951

1
Acts Arms Act 1959 / Arms Rules 2016

DPIIT (for the listed defence products except for small arms of
Licencing
2 calibre 12.7mm and above)
authority
MHA (for small arms of calibre up to 12.7mm)

Manufacturing in the Defence industry requires industrial license (IL) as per the Industries
(Development and Regulation) Act, 1951 (IDRA) or the Arms Act 1959 depending on the
equipment to be manufactured. Since 2014, several clarifications have been issued in this regard
for ease of business. The last relevant press note on Industrial Licence was released in 2019 which
categorized the products requiring IL as follows
  MHA as the licensing authority under Arms Act / Arms Rules
  DPIIT as licensing authority under Arms Act / Arms Rules
  DPIIT as licensing authority under I(D&R) Act

5
 Press Note 2 (2019 Series) dated 11 September 2019 clarified that no IL/Arms licence is required
for the manufacture of any parts or accessories in Defence sector, unless specifically listed in any
annexure of Press Note 1 (2019 series). This shall not apply to issues of Arms licence for small arms
by MHA.

2.3.1.Procedure to Obtain IL
  All applications for Industrial License under IDR Act, 1951 and Arms Act, 1959 can now be
applied online on NIC Portal in their respective forms.

  The Applications are scrutinized for their completeness. Information in respect of incomplete
applications is sought from the applicants.

  If the applications for grant of licence are complete in all respect with necessary documents,
DPIIT circulates them to concerned administrative ministries, Ministry of Home Affairs,
Concerned State Government and other concerned agencies for their comments.

  After receipts of Comments from the concerned Ministries/Agencies, files are processed and
submitted to the Licensing committee for consideration.

  Licensing committee can recommend for grant of licence/rejection of proposal/deferment of

the proposal, based on the comments received and deliberations in the Committee. After
recommendation, the approval of the Minister in charge of DPIIT is obtained for grant of
licences or otherwise.

  Fee. The licence fee ranges from a minimum of INR 5000/- to the maximum of INR 50,000/-
which is to be paid at the time of grant of license for items falling under Arms Act, 1959.

  Validity

  Vide MHA Arms Rules, 2016, the licence granted by MHA and powers delegated to DPIIT
under Arms Act, 1959 for manufacturing shall now be valid for the lifetime of the licensee
company.

  Vide DPIIT's Press Note 10 (2015 Series) dated 22/09/2015, the initial validity of Industrial
License for defence sector has been revised to 15 years, which is further extendable upto
18 years.

6
 3 Ammunition Procurement
in India
Modernisation of the infantry soldier is aimed at enhancing lethality and providing individual
protection. Towards this end, procurement cases for modern weapons such as ATGMs, Air
Defence Guns, Sub Machine Gun with Ammunition, Light Machine Gun, Assault Rifles & Under
Barrel Grenade Launcher (UBGL), Close Quarter Battle (CQB) Carbines, Light Tanks, Main Battle
Tanks are being progressed. All these equipment will require ammunition of various calibres and
categories.

The management of ammunition was done by placing five-year Roll-on Indent on Ordnance
Factory Board (OFB) to enable it to plan its production. (Now the privatised Munitions India
Limited and Yantra India Limited) The indent was placed on mutually agreed targets keeping the
DPSUs capacity in view. The remaining ammunition, which is not being manufactured by the
DPSUs, the Army either imports or procures from Indian Private industry through capital and
revenue route. The ministry of defence has also identified several large calibre ammunitions to be
procured under the "Make in India" category of acquisition.

Classification of Ammunition4

Type Diameter Range Main Weapons

Small Calibre 5.56 to 12.7 millimeter (mm) Carbine, Rifle, Light Machine Gun
Medium Calibre 14.5 to 40 mm Anti-Material Rifle, Grenade Launcher.
High Calibre 73 to 155 mm Rocket Launcher, Gun, Tank
Mortar Bombs ~~ Mortar
Missiles ~~ Tanks & Missile Launcher

3.1. RFI/RFPs for Ammunition

With the governments push for Make in India in the recent years, certain measures have been put
in place to encourage indigenous development of ammunition through Indian private sector
and DPSUs. There was a slew of RFIs / RFPs issued in the last 4 years, seeking participation of the
industry in supply of ammunition to the armed forces. Following is a list of RFI/RFP released in the
last few years (This is not an exhaustive list)

⁴ Source: DGOS (OS-15) letter dated 12.12.2013

7
 Published
Type Service Description QTY
Date
Global Tender Army Cartridge SA 7.62mm×51mm NATO 180631 09-Feb-18
Cartg SA 7.62 mm x 39 mm ball
Global Tender Army intermediate rimless ammunition for 2,17,36,850 23-Apr-18
rifle AK-47
Round 40mm HEAP 7,23,770
Global Tender Army Round 40mm HEDP 1,94,610 28-Mar-18
Round 40mm smoke RP MGL 1,94,610
Round 20mm semi armoured
Global Tender Army piercing high explosive incendiary 25060 11-Dec-18
(SAPHEI) ammunition
Limited Tender Army 30MM HE/T ammunition 34418 18-Jan-19
Single Tender Army 30mm VOG-30 ammunition 15-Jan-19
Open Tender Army Supply of .50 Calibre (12.7MM) Long 15000 17-Jun-20
Rage Sniper Rifle Ball Ammunition

Open Tender BSF AGL Ammunition 30 MM HE 30000 14-Jul-20

Make in India 188600/yr

Army 30mm HEI and 30mm HET 03-Mar-21
Tender for 10 years
Round 40mm HEAP 1,51,400
Round 40mm HEDP 43,200 300000/yea
Make in India
Army Round 40mm RP 32,400 r for 10 09-Apr-21
Tender
Round 40mm HE VOG-25 for UBGL years
GP-25 73,000

Make in India 122 mm Grad BM ER and Non ER 5000/year

Army 03-Mar-21
Tender rockets for 10

Cartg SA 5.56 mm ball NATO for

Global Tender Army 5,73,08,208 20-Dec-21
Tavor assault rifle

40mm Low velocity HE grenade for

Make in India 153620/yea
Army under barrel grenade launcher 29-Apr-22
Tender r for 10 yrs
(UBGL)

Make in India Army Cartridge SA 9mm Subsonic Calibre 159313/yr 13-Apr-22

Tender 158 GR for 10yrs
Make in India Army Grenade 30 mm for AGL 17/AGS 30 500000/yr 19-Apr-22
Tender for 10yrs
Make in India Army BMCS (low zone and high zone) 100000/yr 26-Apr-22
Tender for 10 yrs

8
 Published
Type Service Description QTY
Date
Make in India Supply of carts SA 7.62mm amn (05
Army 6,85,08,599 06-May-22
Tender variants)
Make in India Army 20mm Semi armoured piercing high 3,04,130 11-May-22
Tender explosive incendiary (SAPHEI) amn
Make in India Shell 155 mm ammunition (04 18942/yr for
Army 25-May-22
Tender variants) 10yrs

Note :- All GTE tenders where indigenous capability exists have been foreclosed to encourage domestic industry
and being initiated as OTE.

3.2. Positive Indigenisation List

India has been infamous for being one of the largest importers of Defence Equipment in the
world. Realising the need to curb imports and promote indigenisation the Ministry of Defence
released a '101 Negative Import List' in August 2020. The aim was to
  Recognise the potential of local defence industry.
  Invigorate impetus to domestic Research and Development by attracting fresh investment
into technology and manufacturing capabilities.
  Provides an opportunity for 'start-ups' and MSMEs to take up certain products.

The list is now called 'Positive Indigenisation List'. There have been 2 more lists, after the First List
in Aug 2020. Upon analysing all the three lists, it is quite evident that ammunition is a key focus
area for localisation. Close to 43 products in total have been identified for domestic procurement
only. Here is a list of all the ammunition related items identified by the Ministry of Defence:

Indicative Year-
List Name of Platform/ Weapon/ System/ Equipment Import
Embargo
120mm Fin Stabilised Armour Piercing Discarding Sabot
Dec 2020
(FSAPDS) Mark II Ammo
All variants of Depth Charges Dec 2020
Dec 2020

First 125 mm Fin Stabilised Armour Piercing Discarding Sabot

Dec 2021
List (FSAPDS) New Generation Ammunition
30 mm Ammunition for Infantry Fighting Systems Dec 2021
Mine Fragmentation Dec 2021
Mine Anti-tank Dec 2021
Mine Anti-Personnel Blast Dec 2021

9
 Indicative Year-
List Name of Platform/ Weapon/ System/ Equipment Import
Embargo
Multipurpose Grenade Dec 2021
40mm UBGL (Under Barrel Grenade Launcher) Dec 2022
155 mm Artillery Ammunition Dec 2022
GRAD BM Rocket Dec 2023
First
30MM HEI/HET Dec 2023
List
23 mm ZU Ammunitions Dec 2024
30mm VOG 17 Dec 2024
Electronic Fuses for Artillery Ammunitions Dec 2024
Bi- Modular Charge System (BMCS) Dec 2024
Helicopter Launched ATGM upto 7 Km Dec 2021
Anti-Torpedo Decoy System for Ships (Mareech) Dec 2021
Bund Blasting Device Dec 2021
Second
Counter Mine Flail (CMF) (Land Based) Dec 2021
List
Processor Based Ground Mine (PBGM) Dec 2021
Processor Based Moored Mine (PBMM) Dec 2021
Rocket RGB-60 HE with Fuse Dec 2022
Rocket RGB-60 Practice Dec 2022
Rocket RGB-12 HE with Fuse k3m Dec 2022
Rocket RGB-12 Practice Dec 2022
80 MM Tandem Warhead Rocket Dec 2022
Laser Ordnance Disposal System Dec 2023
Second
List 40MM (Multi Grenade Launcher) Ammunition Dec 2024
Limpet Mines (7 Kg & 15 Kg) Dec 2024
Aerial Fuse for Mk-80 Series Bombs Dec 2024
14.5 MM API (Armour Piercing Incendiary) for Anti Material Rifle
Dec 2025
(AMR)

Surface Mine Clearance System (Land Based) Dec 2025

10
 Indicative Year-
List Name of Platform/ Weapon/ System/ Equipment Import
Embargo
Armour Piercing Fin Stabilised Discarding Sabot (APFSDS)
Dec 2022
125MM Practice Ammo

20 mm ammunition HE/I, HE/T & TPT Dec 2022

Air to Ground Rocket 68mm Dec 2022

81mm Anti Thermal Anti Laser (ATAL) Smoke Grenade Dec 2023
Third
List 40mm Multi Grenade Launcher (MGL) Dec 2023

5.56 x 45 mm (Tavor Ammunition) Dec 2023

7.62mm x 54 (Sniper) Ammunition Dec 2025

155mm Terminal Guided Munition Dec 2025

155mm Ammunition with Course Correctible Fuse Dec 2026

3.3. Make Programs

The Make scheme of acquisition was introduced in early versions of Defence Procurement
Procedure (DPP). Now, with higher focus on indigenisation and introduction on import embargo
on defence equipment, new Make programs have been identified. In future as well, we might see
a lot of the items from the Positive List transitioning to the Make scheme.

Here is a list of Make-II projects associated to ammunition 5

Tentative Cost
SHQ Name of Project Qty Present Status
(in Rs Cr)

Airforce 80 MM Rockets 5000 Feasibility study in

progress. Case under
examination for Make-
III
Army Electronic Fuze for Pinaka 14040 (over 10 140.4 Pre AoN stage
Rocket Ammunition years)

Navy 127 mm Guided Projectile AIP accorded on

21.6.2022.
Navy Limpet Mine Mk 414 (7 Kg) and 50-7Kg, 100- 20.06 AoN accorded on
Mk 430 (15 Kg) 15Kg 04.8.21. EOI issued on
22.9.21.

⁵ https://www.makeinindiadefence.gov.in/projects/projectlist/2/1

11
 Tentative Cost
SHQ Name of Project Qty Present Status
(in Rs Cr)

Airforce 70 mm Air to Ground Rockets 80000 (over 3- - PSQR under

5 years) finalization
Army 125mm APFSDS Ammunition 85,000 1955 PSO issued on
for T-72 & T-90 Tank 11.11.2020
Army 155 mm Terminally Guided 1966 1239.36 EoI issued.
Munitions
Army Pre-fragmented programmable 3,30,000 over 30.6 SoC being formulated.
proximity fuzed ammunition 12 years
Navy Proximity, DA and Graze fuse for 5000 fuzes @ 241 AoN Stage
76/62 SRGM with universal 500 fuzes/year
capability for 76-127mm calibre
ammunition

3.4 The End User Perspective

With contribu ons by Lt Gen SK Upadhya, PVSM, AVSM, SM, VSM (Retd)
Speaking at North Tech Symposium in Udhampur in May 2022, Vice Chief of Army Lt Gen B S Raju
said that the Acceptance of Necessity for almost all weapons and equipment for the Indian Army
will be given to the Indian industry. He further added that future wars need to be fought with
indigenous equipment and that the army intends to categorise 90% of the AONs for indigenous
production. Speaking to the gathered audience while delivering his inaugural address,
"Hereafter, the Acceptance of Necessity (AoN) will only be given to indigenous defence
manufacturers. We will come more than half a distance to meet your aspirations. We will give you
all the facilities that are required, whether it is equipment, testing facilities and most importantly
our time."

As can be seen from the list of opportunities, the Armed Forces have backed the Make in India
initiative and most tenders are issued under the same category. However, this has posed several
challenges in terms of execution. Many of the RFPs issued in 2017/18 have been reissued in 2022
as the Indian industry was unable to convert the opportunities. The predominant reason for this
would be the lack of technical know-how available within the industry. Even if they were to
partner with a Foreign OEM, it is unlikely that the FOEM would forego their IP rights.

There is no doubt about the large requirement of ammunition for the Armed Forces. The
challenge is to develop indigenous vendors who can provide quality ammunition as well as
sustain the capacities for the forces.

12
In this regard, certain realities associated with Indian ammunition dynamics are:

  Ammunition manufacture in India has been a 100 per cent Govt sector activity only. This in
turn was a total OFB monopoly, except for BEL & ECIL producing electronic fuzes for artillery.

  In 2016 the Govt approved the enablement of private industry participation in ammunition
manufacture through long-term contracts. However, due to procedural and other delays, no
contract has been finalised till today.

  Platforms or weapon systems are the focus of acquisition, selection, modernization paradigm
and ammunition is incidental or part of the package provided by the OEM. As the bulk of the
Indian war fighting inventory was imported, so was the ammunition to be used with it.

  As a corollary the need for the separate development of ammunition rarely existed and
accordingly ammunition R&D was low. The outcomes with respect to designing and
providing ammunition for indigenous platforms have also not been very encouraging.

  As a result of the above overtime the Indian ammunition ecosystem developed

predominantly to produce indigenised foreign products. The success of various products
depended on effective absorption of technology, if available or successful reverse
engineering and subsequent long term sustainment of knowledge, quality etc.

The lack of ammunition indigenization over the years may be ascribed to:

  With ammunition being bundled with the platform denial of technology for indigenous
manufacture during initial acquisition could rarely have been the case. However not insisting
on the same along with the original platform or deliberately choosing to rely on in-house
R&D or reverse engineering solutions meant sustained import dependence over the life cycle
of the platform.

  Non-localisation of the complete supply chain of indigenised ammunition and the imported
inputs constraining capacities.

  Non-renewal of time-bound or quantity-restricted licenses.

  Quality deterioration, high failure rate and a large number of accidents leading to the
destruction of large stocks (sudden voids) and loss of confidence in indigenous sources,
ultimately ending up in reverting back to imported sources.

  Non-indigenisation due to small quantities required.

13
 The above was further compounded by procedural and other decision-making issues some of
which were:

  Until 2015, the financial powers to sanction import contracts were not vested with the users
and sanctions were subject to interminable scrutinies and delays.

  Treating ammunition procurement like any other commodity led to situations like insistence
on global tendering instead of buying from OEMs who had designed and certified the
ammunition for warfighting platforms in the inventory. This introduced trials for prospective
new suppliers and competitive vendor behaviour like complaints invariably leading to non-
finalisation of contracts. Certain OEMs refused to participate in such tenders to protest other
bidders not having the necessary IP rights from the OEM.

  Blacklisting or ban on dealing with suppliers who were the sole single source worldwide.

  Vintage platforms not being replaced in time and OEMs discontinuing the manufacture of
ammunition where after repeated tendering elicited no response.

The situation started to redeem after 2016 with the following:

  Unshackled from debilitating procedures under the emergency procurement powers of

2016, the users made up immediate shortages by obtaining stocks from OEMs and well
established sources.

  Additional special provisions in 2017 to speed up and regularly address ammunition

problems were delegated to the users. These however met with limited success due to
certain old processes and procedures tending to creep in.

  Emergency procurement powers delegated yet again over 2020 and 2021, provided due
boost to relief for users' tribulations.

  None of the above, however, were able to introduce due urgency into the 2017 project for
achieving full ammunition indigenisation through the industry by obtaining requisite
technologies and setting up manufacturing infrastructure at zero cost to the Govt. Despite
more than 05 years results are not in sight in the immediate future.

  Since 2020, the users have embarked on offering indigenisation of all imported ammunition
to the industry on a similar model without waiting for the outcomes of the ongoing 2017
cases.

  In addition, new types of ammunition required by the users have been offered under the
Make 2 category to encourage industry R&D and obtain indigenous solutions.

14
3.5 Challenges
Due to the ever changing nature of threats across the globe, India needs to focus on becoming
self-reliant to ensure continuous and timely modernisation of the forces. The challenges likely to
be faced are as follows:-
a) Of the overall defence budget, only six percent is allocated to R&D
b) High R&D costs with extended incubation periods for realising R&D benefits have dissuaded
involvement and investments in R&D by private industry.
c) India is faced with limited expertise in designing critical components in advanced munitions
such as smart and precision munitions.
d) India lacks sufficient infrastructure, and qualified human capital to support R&D ingenuities.
e) Existing agencies have not been efficacious in sharing R&D know-hows with private players.
f) Lack of competition within R&D agencies.
g) Certification process is a long-drawn process. In addition, while much effort has been to
provide access to testing facilities to the private sector, limited number of facilities and long
process means that companies have to wait a long time to be the chance to test their
prototype/products.

15
 4 Defence Public
Sector Units
Ordnance Factory Board (Now 7 new privatised entities) and DPSUs like BDL and BEL have the
oldest and largest industrial setup for ammunition manufacturing. With the primary objective of
achieving self-reliance in equipping the armed forces with state-of-the-art battlefield
equipment.

4.1. Munitions India Limited

MIL is India's largest manufacturer and marker leader in the production of ammunition &
explosives. MIL manufactures a comprehensive range of ammunition including Small Arms
ammunition, Medium Calibre ammunition, Artillery ammunition, Tank ammunition, Mortar
ammunition, Aerial Bombs, Naval ammunition, Shoulder fired Rockets and Pinaka Rocket. Our
explosive portfolio includes High Explosives, Primary Explosives, Propellants, composite
propellants etc.

MIL has 12 state of the art factories spread over five states in India. These are equipped with
modern manufacturing facilities coupled with all requisite test and evaluation facilities. MIL is
continuously modernising its manufacturing facilities to achieve higher standards of quality and
become more competitive. MIL has designed and developed indigenous automated solutions
for ammunition filing and assembly with the assistance of Indian companies. In addition to the
Filling and assembly facilities of the ammunitions, MIL has inhouse infrastructure for
manufacture of initiatory compositions, high explosives, propellants etc. This makes MIL a
complete end-to-end solution provider, reduces our dependence on external agencies and
ensures quality of products. MIL has achieved indigenization level of 95 % in its current product
portfolio.

4.2. Yantra India Limited

Yantra India Limited, Nagpur is one of the seven Defence Public Sector Undertakings, carved out
of erstwhile- Ordnance Factory Board. The company is fully owned by Government of India.
Yantra India Limited is a conglomeration of production units, Training Institute, Regional
Controllerate of Safety and Recruitment Centre. The production units are located in West Bengal,
Uttar Pradesh, Madhya Pradesh and Maharashtra.

The company possesses state of the art plant and machinery for production of small medium
high calibre shell body hardware for Artillery Tank Guns, mortars, rockets, pod assembly, air

16
dropping bombs and cartridge cases. Mechanical and Electronic Fuze hardware are also
manufactured at YIL.

4.3. Bharat Dynamics Limited

Bharat Dynamics Limited (BDL) has graduated from being a missile manufacturer to a Weapon
System Integrator and has emerged as a complete solution provider for the Indian Armed Forces.

BDL has four manufacturing units, out of which three are located in Telangana State (Hyderabad,
Bhanur and Ibrahimpatnam) and one in Andhra Pradesh (Visakhapatnam). As a part of its
expansion plan, BDL is setting up one unit at Amravati in Maharashtra to cater to the growing
demands of the Armed Forces.

BDL, with the support of DRDO, has been manufacturing various types of indigenously designed
and developed missiles and underwater weapons. One such product being produced by BDL is
the Akash Weapon System, a Surface-to-Air indigenous Missile, involving of a large number of
supply chain partners from the industry. Similarly, The Heavy Weight Torpedo and Light Weight
Torpedo developed by NSTL, DRDO, are being manufactured by BDL at its Visakhapatnam Unit
with active participation from the industry. The Light Weight Torpedo is also being exported.

BDL is now set to produce the world class 'Beyond Visual Range' Astra Weapon System for the
Indian Armed Forces. The weapon system has been developed by DRDO. The Company is also
extending its technical support to its vendors including providing test facilities available with
BDL. The procedures have been streamlined to encourage active participation of 'start-ups'. BDL
is also working with DRDO for Transfer of Technology for products like Infra-Red Flares, which are
a part of Counter Measures Dispensing System to be manufactured and offer to Indian Armed
Forces as a 'comprehensive counter measure solution'. These items are currently under import
category.

Recent trends indicate rapid strides are being made by countries over the globe in utilizing
Artificial Intelligence (AI) based technologies for development of Next Generation of weapon
systems. Taking cognizance of this fact, BDL has started undertaking development of products
for the Armed Forces with AI Technologies with active participation of start-ups.

As a part of its R & D efforts, BDL has developed Amogha - III, the third generation Anti-Tank
Guided Missile. The missile will be offered after successful completion of user trials to the Indian
Armed Forces as well as export market. The Company has entered into an MoU with International
Institute of Information Technology (IIIT), Hyderabad, India for joint development of AI based
technologies for its range of products. Thrust is being given to explore tie-ups with other foreign
OEMs for new missiles and underwater weapon programmes with potential Transfer of
Technology and meeting the 'Make in India" criteria.

17
 4.4. Bharat Electronics Limited
Bharat Electronics Limited (BEL) is an Indian Government-owned aerospace and defence
electronics company. It primarily manufactures advanced electronic products for ground and
aerospace applications. Headquartered at Bengaluru, BEL is executing its business through 9
Units with 14 Strategic Business Units as production centers, 2 Central Research Laboratories & 1
Product Development & Innovation Centre as Technology House, and numerous Regional
Product Support Centers, Marketing Offices (In India & Overseas) and overseas Procurement
Offices for its vast customer base.

BEL manufactures Aerospace & Defence equipment which include Weapon Systems, Radars,
Sonars, Fire Control Systems, Tank Electronics, Electro-Optics, Communications, Electronic-
Warfare, Network Centric Systems, Homeland Security & Smart City Business, Software, Missile
Electronics, Composites, Space Electronics, Unmanned Systems, Arms & Ammunition

Depending upon the business trend, BEL has already expanded its portfolio in the business
segment like Arms & Ammunition, Energy Storage Products, Seekers & Missiles, Network & Cyber
Security, Railways & Metro Solutions, Healthcare Solution & Medical Electronics, Civil Aviation and
Composites. Depending upon the business trend in future, further diversification is anticipated.

BEL has its subsidiaries with World players like Thales and GE in Aerospace & Defence and
Healthcare respectively, namely, BEL-Thales Systems Limited and GE-BEL. Further Te c h n o l o g y
collaborations with various OEMs are in place based on project specific requirements.

18
 5 DRDO
5.1. Ammunition Technology
Defence Research and Development Organisation (DRDO) is India's premier institute for research
on defence technologies. Close to 41 labs under DRDO focus on different aspects of military
technologies. The key labs which work on ammunition and missile technologies are listed below.

Laboratory Name Location Area of Research

Composite
Advanced Centre for Energetic Materials (ACEM) Nashik
Propellant
Missiles & Strategic
Advanced Systems Laboratory (ASL) Hyderabad
Systems

Armaments Research & Development Establishment

Pune Armaments
(ARDE)

Centre for Fire, Explosives & Environment Safety (CFEES) Delhi Explosives
Missile & Strategic
Defence Research & Development Laboratory (DRDL) Hyderabad
Systems
Missile & Strategic
Research Centre Imarat (RCI) Hyderabad
Systems
Terminal Ballistics Research Laboratory (TBRL) Chandigarh Ballistics

5.2. Transfer of Technology

Defence Research and Development Organisation (DRDO) has been developing technologies,
products, systems that are required for Indian Armed Forces. These projects are undertaken by
DRDO as Mission Mode (MM), Technology Demonstrator (TD), Science & Technology (S&T),
Infrastructure (IF) and Product Support (PS) projects. In addition, DRDO also undertakes/
supports various technologies & products whose development has been undertaken through
Research Boards, Extramural Research and grant-in-aid schemes.

19
 DRDO has developed Guidelines for Transfer of Technology, which is evolved continually to meet
end user goals. Following is a list of some of the ammunition technologies developed by the
relevant DRDO labs:

Ammunition Technologies Developed by DRDO

Lab/Centre Technology Developed

Advanced warhead Technology
KE Rod Technology
Multi Point Initiation Technology
ARDE
Deep Penetration Warhead
Low L/D Shaped Charge Warhead
Ferroelectric Pulse Power Technology for Initiation Of Warheads
CFEES Environmental & Explosive Safety Technology
Two pulse Rocket propulsion system
Solid Fuel Ducted Rocket Ramjet technology
Liquid Propellant based Ramjet System
DRDL End game system based on Laser Proximity Fuse
Control guidance algorithms for various class of missiles
Development of on the move Communication system, on the move tracking
system, on the move command control system.
Ultra-fine β-HMX and Fine RDX< 6 mm (surface mean)
Electronic Fuze for 81mm Mortar Bomb
TBRL Post Impact Delay Fuze for Air Delivered Bomb
Multi-Mode hand grenade
Bund Blasting Device (BBD) Mk-II

20
 6 Role of Private Industry
To achieve the goal of self-reliance in the Defence sector, continuous efforts are being made to
increase indigenization, wherever technologically feasible and economically viable. With the said
changes and amendments in various policies, the Indian private industry is keen on supporting
the requirement of the Armed forces and the Make in India vision.

Post liberalisation of the defence sector in 2001 and further amendments in 2006, we are now
looking at a more than a decade of development since then in the private industry. In the next few
sections, we look at the companies with Industrial Licence for arms and ammunition
manufacturing, and what progress has been made within the ammunition industry along with
technology collaborations.

6.1. Key players in Private Industry

Company Products Collaboration Future Plans

Ÿ 120 FSAPDS (Mk II) and Ÿ A JV exists with Plan to manufacture as
125 FSAPDS Elbit Advanced Make in India product
Ÿ 30 mm HEIT/APIT Systems Ltd. for all the items listed
Ÿ 30 mm VOG Ÿ A MoU exists with with their explosive
Ÿ 40 mm HEAP/HEDP/RP Bharat Explosives partner through Kalyani
for MGL and HE VOG 25 Ltd and Munitions Strategic Systems Ltd
Bharat for UBGL India Ltd for specific (KSSL), a fully owned
Forge Ÿ Shells of 40mm, 120 items. subsidiary of Bharat
mm, 60mm and above, Ÿ A MoU exists with Forge Ltd.
155mm IAI and Elbit Israel
Ÿ BMCS with partner for specific Item.
Ÿ New Family of Ÿ MoU with Arsenal
Munitions for Indian India Ltd.
Armed Forces
Manufacture of Range The BHSEL is Propose to manufacture
Extension Kits for established as JV of Long range Guided
Blue
converting the unguided Elbit Systems Ltd, Israel missiles, laser guidance
Horizons
bombs to guided bombs and Aditya Precitech kits, modernisation of
Strategic
with range enhancement Pvt Ltd, Hyderabad existing laser guidance
Engineering
from 8km to more than kits, for Futuristic
(BHSEL)
100km with precision. Indigenous Combat
Vehicle, light tank

21
 Company Products Collaboration Future Plans
Ÿ Small Calibre – Ÿ Small Calibre – Italy Ÿ Small calibre
5.56x45mm, Ÿ Medium Calibre- ammunition capacity
7.62x51mm, Bulgaria to be enhanced to
7.62x39mm,9x19mm,.3 220 million rounds
38 Sniper per year.
Ÿ Medium Calibre Ÿ Medium calibre
23mm – HEIT and APIT 23mm HEIT –
30mm- HEI and HET 3,00,000 per year
40mm HEAP, HEDP, RP, 23mm APIT – 2,00,00
VOG-25, LV HE per year
Ÿ Large calibre – 155mm 30mm HET- 40,000
Adani
per year
30mm HEI- 1,50,000
per year
40mm HEAP-
3,00,000 per year
40mm HEDP-
3,00,000 per year
40 mm RP – 3,00,000
per year
40mm VOG-25-
3,00,000 per year
Ÿ Ballistic Protection Ÿ Manufacturing of
Products and Full Ammunition for
Ammunition. Tanks, Artillery and
Ÿ Produce Boron Carbide Infantry Support
and all other materials Weapons.
for Ballistic protection. Ÿ Ballistic armouring of
Ÿ Combustible Cartridge Fixed and Rotary
SMPP Wing aircrafts, Naval
Cases for Bi Modular
Charge System for all vessels and Land
calibres of Tanks and Platforms.
Artillery Guns & Ÿ Armouring /
Mortars in Indian Army. manufacturing of
Wheeled and
Tracked platforms.

ŸMissile sections LTMMSL is a joint LTMMSL is looking to

Ÿ Air-borne Launchers for venture between L&T expand its capabilities
LTMMSL missile systems and MBDA. to offer ATGM and
(L&T MBDA LTMMSL is looking to SRSAM missile systems
Missile establish MOUs with under Buy Indian or
Systems MBDA’s global partners IDDM processes.
Limited)i / supply chain and
LTMMSL, and its
domestic supply chain.

22
6.2. Foreign Collaboration
The fact that India ranks amongst the top 10 countries in the world in terms of its military
expenditure, makes it one of the most attractive markets for defence. This makes it a no-brainer
for any foreign original equipment manufacturer (FOEM) that India should be on their customer
list. Having said that the GoI has an agenda to reduce import dependence in defence by 35-40
percent and it is actively promoting indigenous defence manufacturing with initiatives like Make
in India and policy reforms including allowing 100 percent Foreign Direct Investment (FDI). So
instead of direct product import the role of FOEM is seen to be changing towards co-
development and co-partnership.

Several overseas defence companies, such as Expal of Spain, Nexter of France, Rosoboronexport
of Russia, Chemring Group of the United Kingdom, Saab of Sweden, Elbit of Israel, Rheinmetall
Defence of Germany, Diehl Defence of Germany, Denel of South Africa, Yugoimport of Serbia,
Bumar of Poland, Orbital ATK Armament Systems of the United States and Arsenal of Bulgaria,
are/were in talks with private Indian companies to provide cutting-edge technology for multiple
Indian ammunition programs.

The role of FOEM would be that of a technology partner to the Indian company. As of date no
Indian private company has produced ammunition for the armed forces. The GoI would expect
100% transfer of technology (ToT) from the FOEM. This technology transfer will not be restricted
to the know-how but also include the know-why of the design and processes. From a business
point of view the FOEM would be expected to make investment in the Indian venture through the
FDI route. This would make them an official stakeholder in the process and ensure complete
cooperation in terms of ToT. The FOEM can look at export potential once the Indian company is
fully operational and is able to provide a cost advantage vis a viz their current manufacturing
operations outside India.

23
 7 Way Forward
7.1 Recommendations from the Industry
7.1.1.Ministry of Defence
  Due considerations should be given by the end-user and DGQA for trials required, and the
number of ammunition rounds sought when dealing with Make in India programs.

  Certain ammunition/components/modules need to be imported from OEMs and need

considerable time to indigenise. However, the Office Memorandum released from the
Department of Expenditure during Aug 2020, in the subject matter of Global Tender Enquiry,
increases the project execution time for PSUs. This needs a relook from the MoD.

  Procurement process has too many agencies involved, in addition to the limited time given to
the industry after the issue of the RFP.

  Industry could be intimated of the Long/Mid-term procurement plans for better planning.
Also, several RFPs have been issued without any further action. More transparency and a
collaborative environment are required for greater success. This also helps in assessing
business viability for the private sector. As all the Make in India programs requires substantial
capital investment, technology collaborations and a long gestation period.

  When the industry develops and proves the ammunition product, there will be a huge export
potential as well. The government may look at schemes to fast-track the development of
these programs for private industry.

  Early realisation of Integrated Capability Development Scheme (ICADS) of the Indian armed
forces to facilitate synergy among the forces and promote defence manufacturing and R&D

  Leverage the liberalised FDI policy to encourage technology transfers from foreign OEMs for
high-end technologies

7.1.2. Industrial Licence

  There is a need to ease licensing for explosives products. A provision for status updates and
tracking of applications should be provided.

  Implement a redressal mechanism to allow companies to track and clarify any deficiencies in
applications. Mechanism to be put in place to ensure the processing applications for licences
is completed strictly within stipulated timelines.

24
  Greater transparency to be established regarding the grant/denial of licenses. The applicant
should receive adequate information on why the licence is being denied.

  Access to nodal officers assigned by licencing authorities may be improved.

  If the licence demands what is not given in the SOP, then the process becomes extremely
complicated and slow when companies are asked for something not given in the formatted
documents. A standardised format for submitting additional information and holding an
interactive meeting with applying industry/organisations to explain requirements may help
speed up the process

7.1.3.Export / Import Licence

  End User Certificate format may be reviewed, especially the clauses pertaining to the re-
export of the products.

  Previously, companies would procure Critical raw materials/components, which are not
available in India, and spares/accessories of Imported machines directly from OEMs or their
Indian dealers. However, due to minimum Indigenous content requirements, Indian dealers
are unable to offer import critical items. This results in delays in the procurement of raw
material/spares/ accessories of foreign origin. The government may relook at Import policies
from this aspect for ease of supply chain management.

7.1.4. Technological
  Accelerate and promote a certain degree of defence research and development outside
DRDO. Ease the process of contracting R&D from academia and private industry.

  Technology being transferred should have current and futuristic defence applications and
Issues relating to IPRs and Patent must be addressed

7.1.5. Ammunition Supply

  Plan for ammunition indigenisation must be discussed in parallel when inducting a new
platform.

  Unshackle the 2017 proposal for industry-led ammunition indigenisation cum production
and complete the same before end 2022.

  Facilitate and stabilise at least two manufacturers (one DPSU and one Private sector) for every
type of ammunition.

  Permit and minimise processes to a single window model for ammunition exports by
industry.

25
 About Sugosha Advisory

Sugosha Advisory, is founded on the principle of providing "Value Based Consulting" to our
clients, partnering with them, so as to create an impact on their revenue growth. With a team of
erudite industry veterans, having deep domain experience in the Aerospace and Defence
verticals, Sugosha Advisory specialises in Defence Policies, Procurement Procedures and Offsets.
Sugosha Advisory leverages the expertise of the sectoral experts for a comprehensive and a
result-oriented approach.

Our other core services include Regulations & Licensing (Industrial, Export and Import), Strategic
Business Development, Market Research for defence manufacturing companies.

We at Sugosha, also publish a monthly magazine, DefInsights, featuring news focused on

procurement for the Indian Armed Forces. DefInsights, a Sugosha Media presentation, enjoys a
circulation of more than 3000 professionals worldwide.

Sohil Patel
sohilpatel@sugosha.com
+91 9886812348
www.sugosha.com

26
Notes

27
 Notes

28
 About FICCI About CENJOWS
Established in 1927, FICCI is the largest and oldest apex CENJOWS was raised at the ini a ve of Ministry of
business organisa on in India. Its history is closely
Defence on 24 Aug 2007 and is registered under 'The
interwoven with India's struggle for independence, its
industrializa on, and its emergence as one of the most
Socie es Registra on Act 1860'. The centre has been
rapidly growing global economies. set up to:
A non-government, not-for-profit organisa on, FICCI is the n Rise above sectoral and departmental legacies,
voice of India's business and industry. From influencing and examine joint warfare and synergy issues in
policy to encouraging debate, engaging with policy makers their en rety.
and civil society, FICCI ar culates the views and concerns of
industry. It serves its members from the Indian private and n Provide the much-needed interface between
public corporate sectors and mul na onal companies, various stakeholders, viz the government, public
drawing its strength from diverse regional chambers of
and private sector, academia, NGOs and civil
commerce and industry across states, reaching out to over
2,50,000 companies. society.

FICCI provides a pla orm for networking and consensus n I n i a te d e b a te s a n d d i s c u s s i o n s i n a n

building within and across sectors and is the first port of call independent and unbiased milieu for emergence
for Indian industry, policy makers and the interna onal of best possible alterna ve.
business community. Established in 1927, FICCI is the
largest and oldest apex business organisa on in India. Its Mission
history is closely interwoven with India's struggle for
independence, its industrializa on, and its emergence as To promote Integra on as a synergis c enabler for the
one of the most rapidly growing global economies.A non- growth of Integrated Na onal Power and provide
government, not-for-profit organisa on, FICCI is the voice
alterna ves in all dimensions of its applica ons
of India's business and industry. From influencing policy to
encouraging debate, engaging with policy makers and civil through focused research and debate.
society, FICCI ar culates the views and concerns of industry.
It serves its members from the Indian private and public
corporate sectors and mul na onal companies, drawing its
strength from diverse regional chambers of commerce and
industry across states, reaching out to over 2,50,000
companies.
FICCI provides a pla orm for networking and consensus
building within and across sectors and is the first port of call
for Indian industry, policy makers and the interna onal
business community.

Federation of Indian Chambers of Commerce and Industry (FICCI)

FICCI Federation House, 1, Tansen Marg, New Delhi - 110001
E: vivek.pandit@ficci.com; somendra.gautam@ficci.com
T: +91-11-23487391/384 F: +91-11-23765333
W: www.ficci.in