The Defence Ministry has set up a costing committee to resolve the standstill over starting the Amethi rifle factory to manufacture 6,71,427 AK-203 assault rifle. This is owing to the fact that Indian Ordnance Factory Board and its Russian partner Kalashnikov till date are not able to present a reasonable pricing plan. The costing committee set is expected to fix a fair price for the manufacture of the rifles - its basic version - keeping in mind the 100% indigenization cost of Indian components. The price bid for project has been submitted and the committee has been given two months to reach an agreeable price for the project.
Previously, the Defence Acquisitions Council had granted Acceptance of Necessity (AoN) to procure the AK-203 rifles at an estimated price of Rs 4,358 Crores way back in January 2019. However, the JV first sought repeated extensions to submit its techno-commercial bid and then in Feb 2020 it finally submitted but quoted a price much higher than the benchmark price.