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AMMUNITION MANUFACTURING BY INDIAN INDUSTRY

The amended RFP for the production of range of critical ammunition to maintain the operational preparedness of the Land Forces and to provides the necessary momentum to 'Make in India'. Under the new policy, the MoD is willing to provide long-term commitments and firm orders of multiple types of ammunition to private players, at competitive prices.

The private sector participation under the 'Make in India' scheme for manufacture of Ammunition, as the indigenisation through the Ordinance Factory Boards did not take off as expected, creating massive deficiencies in the stocking as per the laid down scales of war wastage reserves. Resultantly, various types of ammunition have been imported in the last few years to the tune of average about Rs. 1000 Crores each year. With an aim to reduce imports dependence, India has decided to procure ammunition requirements from domestic sources now. Recently, the amendments in Arm Rules-2016, allowed Private sector to seek License for manufacture and proof test of arms & ammunition for military use. Some of the Private defence companies have sought Industrial License and some others are in pipe line. Some of the private companies such as Solar Industries India, Premier Explosives Limited have even sought Industrial Licences (ILs) in last few years.

            The initial RFP was issued for the production of a range of ammunition, in March 2017 to maintain the operational preparedness of the Land forces. The eight RFP for manufacturing of under mentioned ammunition was issued by the ministry:-

            Request for Proposal (RFP) had a number of flaws which were brought to the notice during the pre-bid meeting in May 2017. After six corrigendum's to extend Bid Date, it took almost nine months to come out with amended RFP. The amended RFPs has now also allowed DPSUs and PSUs to bid for the approx. $2-billion ammunition.

            Some of the provisions in the initial RFP were very restrictive for the Private sector and MoD has revised limits Earnest Money Deposit (EMD), Annual Turnover and Net Worth etc .The gist of main amendments are enumerated below:-

            By allowing Defence Public Sector Undertakings and Public Sector Undertakings to bid, once again the ministry has favored public sector. The advantage of their infrastructure, experience, turnover, net worth and various other parameters will once again delay the procurements for the Armed Forces. Seems that ministry is yet to have confidence on private sector as, it has not concluded any major 'Make in India' project till date.

[Issue: 1, January-February 2018]

 

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