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Bhanu Prakash Srivastava, Director (Other Units), BEL, and Mr S K Rout, Director (Operations), MIL, exchanged the MoU documents at Defexpo in the presence of Ravi Kant, CMD, MIL, Joydeep Majumder, Executive Director, BEL and other senior officers of BEL and MIL.

The MoU aims at leveraging the complementary strengths and capabilities of BEL and MIL and strengthens the spirit of the Make In India initiative of Government of India, for achieving self-reliance in Defence Sector. The co-operation will enable the companies to   jointly address the domestic and Export opportunities in the areas of Ammunition, Explosives and related systems and sub systems.

MIL is a DPSU under Department of Defence Production, Ministry of Defence, Government of lndia. MIL, India’s largest manufacturer & market leader, is engaged in the design, development and manufacture of various types of ammunition and explosives including Small, Medium and High Caliber ammunition, Mortars, Rockets, Hand Grenades, High Explosives, Propellants, Initiathe tory Compositions etc.

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On the other hand, if the private sector focuses primarily on import substitution through Make in India projects and design & development of advanced munitions, with no assurance of successful outcomes, low or no return on investment (ROI) on huge initial investments will not enthuse the private sector.

Ammunition is procured through both DAP-2020 (Capital) and DPM-2009 (Revenue) routes. Unlike weapon platforms, development of munitions calls for experimentation in the real world, with real weapon systems and platforms, which most private players are unlikely to have. Therefore, the munitions ecosystem has nuanced dynamics and calls for a flexibility in relevant policies and approach.

Armed Forces’ Perspective

The armed forces require advanced, smart, precision-guided, beyond line of sight (BLOS), loitering and intelligent munitions, for land, naval and aerial weapons alike. 

Advanced munitions requirements are centered on autonomous/ man-in-loop munitions, modular and dual band, jam resistant sensors and guidance, dual CCD, cooled and uncooled seekers, pulsed motor/ SFDR/ ramjet propulsion and penetration-cum-blast/blast-fragmentation warheads.

The armed forces are also looking for munitions and payloads for unmanned platforms – anti-personnel, anti-tank, kamikaze, EW, loitering and Swarms. 

For existing inventories the armed forces would like to have range extension and precision guidance kits. 

In particular, the Indian Air Force (IAF) would also like to see indigenisation of electronic fuzes, indigenous immune GPS and ECM/ECCM. In addition, seamless integration of munitions/ missiles with platforms and provision of battle management systems for the munitions was required.

The Navy would also like to see indigenization of underwater systems, missiles, fuzes, torpedos, mines, gun ammunition, counter-drone systems and chaff. 

The Ministry of Home Affairs (MHA) was earlier procuring small arms (SA) ammunition from Ordnance Factory Board (OFB). With creation of Munitions India Ltd (MIL), a corporate entity, procurement, QA/QC and testing policies and procedures need a review. 

Import dependence for ammunition of Tavor Rifles, AMR, AGL, Dragunov Sniper Rifle, UBGL, MGL should be overcome and accorded priority. 

Similarly, indigenous advanced materials and alloys are required and dependence on import should be reduced. 

Atmanirbharta in Munitions

The Indian armed forces exploited precision munitions during the 1999 Kargil War with great effect and during the Balakot Strikes (2019). Thus was felt the inescapable need to develop smart and precision munitions.

There have been policy shifts to enhance the role of private industry and MSMEs to strengthening the ecosystem for munitions. Many barriers like capping of number of bids, criteria for financial eligibility and credit rating have been removed by the Government through considerable relaxations.

In 2016 the Government kick started “Manufacturing of Ammunition for Indian Army by Indian Industry” and issued RFPs in 2017, which were duly amended based on the market response. Four of the 12 projects have reached the trial stage. The three positive indigenisation lists promulgated in the recent past list nearly 50 items of ammunition, including Guided Extended Range Pinaka Rockets, Advanced Light Weight Torpedos, Anti-Radiation Missiles and Loitering Munitions. This reflects the confidence of the Government in R&D and manufacturing prowess of the domestic defence industry.

DRDO-Industry Special Purpose Vehicles (SPV) are allowed to develop essential advanced defence products.

Sixty eight per cent of the capital acquisition budget has been earmarked for the domestic industry in 2022-23 and 25 per cent of the domestic capital procurement budget earmarked for promotion of private industry, MSMEs and start-ups.

The scope of Defence Innovation Start-Up Challenges and Technology Development Fund has been expanded to create more opportunities for them.

Industry Perspective

As compared to the view prevailing about 10-20 years ago, the armed forces have better confidence in private industry and defence PSUs is high on their ability to meet their requirements. This has been substantiated by 11 tenders which were issued for munitions between March 2021 and May 2022, are under the Category of Make in India, spanning a 10-year requirement. 

The armed forces have demonstrated a flexible and pragmatic approach through interactive RFPs.  

The Industry thinks that rate contracts, with agreed variable rates over time, would be more viable for contracts spanning 10 years, as for munitions. 

Make 1 and 2 Categories. Make 1 & 2 are unviable for rockets/ missiles and certain advanced munitions, considering the time and costs involved in the development of the prototypes. Integration kits for aerial munitions carry a high cost of Rs 14 Cr per aircraft, rendering Make 2 unviable.

Another case in point is the timeframe provided for responding to Expression of Interest (EoI) for TGMs for 155mm, where five prototypes were sought in 30 weeks, a product with a CEP of 10 meters, GPS, laser designator, ECM/ ECCM features, all of which required R&D, time and funds. Foreign original equipment manufacturer (FOEM) may not be willing for ToT for Make 2, since a prototype may not result in an order eventually, whereas, for Buy Indian category, even 60% Indian content (IC) may be achievable with a contract in the hands of the Indian Partner. 

FOEMs are likely to exploit the opportunity by partnering with Indian companies, many of which are already exporting items based on competitive advantage in quality and not costs.

Due to peculiar restrictions on FOEMS, ToT and IPR for munitions are more challenging than for other weapons and systems. Moreover, percentages of IC stipulated at 50%-60% are unviable at the prototype stage, and must be lowered. 100 per cent indigenisation was not feasible since the FOEM may not hold IPR for 100 per cent components. In case the material itself was not available in India, it should not be included while determining policy on IC percentage. 

Though 12 RFPs were initiated for procurement of munitions from private industry in 2017, the procedures and outcomes did not inspire much confidence, since there were several amendments issued, only four had reached the trial stage and no order had fructified in five years. Three months timeframe is too short for responding to RFPs for tank/ artillery munitions. 

PPP or SPV models would be more suitable for missiles, rockets and advanced munitions.

Industry feels that even if its products do not meet 100% QRs, a certification stating the extent to which the product met the criterion would help the industry offer the product for exports. 

Though the licensing norms had been opened up and liberalised, not more than 15-20 licenses had been approved for munitions. 

Research & Development

Smart and advanced weapons include components like Inertial Measurement Units (IMU), seekers and Servo actuator motors, which are still imported. The Government needs to provide financial support for design and development.

The Industry feels that transfer of technology (ToT) to the Industry from DRDO is feasible for technologies like thermobaric munitions. For kinetic munitions, where explosives do not play a major role, ToT should be to the OEM for the kinetic component, and not the partner for explosives.

Development cum Production Partner (DcPP) route could result in different types/ models of the same item, creating larger inventories.

Quality Control

Users are concerned about quality, cost, timely delivery and surge capacity. Munitions should be usable and stay stable over a wide temperature range of -40 deg to +50 deg Celsius. The ineffectiveness of thermobaric/blast munitions in high altitude areas could be factored in while framing user requirements. 

Accident occur every four days. Quality is of concern when it comes to propellants, batteries, mines, primers and casings.

Replenishment and life extension of missile systems, which entail testing, refurbishment, safety, servicing and reliability, could be addressed through long term JVs of over 20-30 years. 

Apportioning the process QA/ QC responsibility to the manufacturers is deemed an enabling provision. 

Small Arms/ Mines/ Explosives are stored for decades, and have a long product life. They are safe and life extension procedures are in place. DRDO/ HEMRL/ DGQA and also the industry have set up state-of-the-art facilities for testing and ensuring shelf life in terms of quality and reliability. 

Infrastructure 

Since the shelf life of munitions exceed 10 years, a manufacturer may secure only one to two orders, resulting in production lines remaining idle and unproductive, unless it is utilised for exports. Private Industry should be allowed to partner with MIL/ YIL/ DPSUs for exports. It is financially unviable to harness critical technologies for limited requirements, eg, BMCS for 155mm and four variants of 155mm shells, both spanning 10 years. 

Role of Academia

There is a need for the Services and scientists to study ammunition technologies. IITs have the necessary environment and infrastructure for these studies. MIL has already inked an MoU with the IIT Madras for sponsored M.Tech courses. Collaboration with Academia will ensuring development of reliable products having better design and higher quality standards. 

IIT-M only has policy clearance for research in explosives. This should be extended to other Centres of Excellence/ IITs. It has contributed actively especially in the field of Ramjet Technology for 155mm artillery projectiles. Intelligent munitions are being developed in collaboration with IIT Delhi.

IIT Madras has offered to conduct tailor-made post-graduate programmes for Services as well as DPSUs/MIL/YIL/private industry.

BEL has contributed to the development of 125mm FSAPDS, achieving DOP greater than 530mm.

Recommendations

Flexible Policy Approach. For imported ammunition to be developed by Industry, it is not easy to get to the prototype stage with indigenous content which was feasible with the foreign vendors for weapon systems. For setting up a facility in India with a foreign vendor, FOEM is not likely to agree for providing ToT/ IPR, because ammunition licenses are controlled by foreign Governments. Hence, a flexible approach is necessary for munitions.

Bidding Criteria. Various policies including multiple participation by the bidders, financial eligibility, and issue of credit rating may be relaxed further to incentivise industry participation in defence production. 

Time to Respond to RFP. The time to respond to RFP for tank/ artillery munitions in a three months timeframe is too short. It should be a minimum of 4-6 months. 

Rate Contract. Provision for a Rate Contract for the supply of regular ammunition is recommended. The commercial quotes should remain valid for longer periods. Predictive costing for a period of certain years is not viable due to a large number of intangible attributes in the costing of military goods, therefore, rate contracts provide a viable solution. 

Make II Route. Design, development and R&D for the prototype(s) needs time and financial resources. Though the users now prefer the Make II Route, the private companies find it unviable. Make II cases can be a success story for ammunition manufacturing ecosystem in India, only if the Government provides assurance and monetary incentives, and relaxes the Indigenous content criterion on a case-by-case basis. 

Make II & III Route. Indian firms may manufacture ammunition either in collaboration or with ToT from foreign OEMs. The restrictions of 60 per cent indigenous content (IC) at the prototype stage should be relaxed. 100 per cent indigenisation is not feasible since the FOEM may not hold IPR for 100 per cent components.

DPSU/MIL + 1 Industry Player. The Model of DPSU/ MIL + 1 industry player can be adopted by the Government. Facilitate and stabilise at least two manufacturers (including MIL) for every type of ammunition.

Share Plans with Industry. Industry should be informed about long/ mid-term procurement plans. More transparency and a collaborative environment are required for better outcome delivery. 

Import and Storage of Explosives. It is difficult to store or import ammunition by any private player even if they have an explosive partner. Therefore, private companies and their foreign partners have to depend on Armed Forces for storage, transport and escort. This gives monopoly to DPSUs and a few explosive companies. This needs to be reviewed and redressed. 

Munition Ecosystem. Apart from the MoD/ DDP, the industry needs to proactively engage with the Services to establish and nurture a defence ecosystem that would produce quality, state-of-the-art weapon systems.

Timely Supplies. Once the contract is awarded, timely supply is important and post-sale services must be good. Provisions should be made to ensure that slippages and delays result in automatic activation of penalty clauses to enhance accountability. 

Time Bound Indigenisation. 

Shedding import dependence for ammunition of Tavor Rifles, AMR, AGL, Dragunov Sniper Rifle, UBGL, MGL should be accorded priority. 

Bidding of only 12 items from the three lists of Indigenisation (in revenue route) have been opened. Remainder items (starting from Dec 2021 till Dec 2027) have not been opened for bidding. It takes almost three years after the contract is finalized for the Services to get the ammunition. Regular interaction is required between DDP and Industry/DPSUs/ MIL/ YIL to ascertain which route to take -Make II/Make III by industry, or based on Revenue RFI/ RFP or Make-I.

ToT Provisions. It is recommended that for kinetic munitions, where explosives do not play a major role, ToT should be to the primary OEM for the kinetic component, and not to the partner for explosives. 

Enhancing iDEX and TDF Outcomes. Based on success and experience gained in these innovative approaches, the provisions should be consistently reviewed and refined. 

Incentivisation of Design and Development. To achieve 100 per cent Aatmnirbharta in defence manufacturing, industry needs to foray into niche sectors like the manufacturing of fuzes, seekers, missile engines, etc.

R&D for New Advanced Munitions. Setting up a new design and research organization as an alternative to DRDO, to infuse competition in R&D, is recommended.

New Infrastructure/Capacity  DPSUs/ MIL/ YIL should collaborate with the industry to mutually create and develop new infrastructure, including indigenisation of plants for explosives, to design and develop products. The existing infrastructure for ammunition should optimally be used by diversifying the products. 

Industrial Licence. License for military equipment (including ammunition) is still delayed compared to the expectations. Transparency is required in the grant or denial of licenses.

While the recent policy initiatives of the Government are welcome, the recommendations of the Industry need to be considered by stakeholders in the right earnest for furtherance of Make in India, fostering the growth of the domestic defence industry and ensuring requisite preparedness of the armed forces.

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He said a healthy mix of local endeavours and foreign collaboration was the bedrock of India’s journey on the road to self-reliance in the defence manufacturing sector.

“Scientific and technological as well as the economic development of a nation is reflected in the capacity of its weapons and ammunition. For India to become a world power and one of the leading countries in defence production, we must move forward in the indigenous design, development and production of ammunition,” he said during a conference, ‘AMMO India 2022,’ jointly organised by the Federation of Indian Chambers of Commerce & Industry (FICCI) and Centre for Joint Warfare Studies.

Import substitution of ammunition, which is a recurring requirement, is a top priority for the government. It has imposed a phased ban on the import of different types of ammunition to achieve self-reliance.

Singh said precision-guided ammunition will play a key role in future warfare — equal to weapons and platforms — due to its constantly-evolving nature.

He said the use of such ammunition played a critical role during the Kargil war and the 2019 air strikes on a terror base in Pakistan’s Balakot. “Earlier, only the size and explosive capacity of bombs mattered, but now their smartness is equally important,” Singh said.

The minister went on describe the advantages of smart weapons for precision targeting.

“If any enemy base is to be destroyed, then precision ammunition will selectively target it and not any civil establishments. This is not the case with traditional ammunition. Wars are fought with the country’s military, not with its people. Through precision ammunition, destruction of civil establishments can be avoided and the values of peace and humanity in times of war can be preserved.”

He enumerated the steps taken by the government to boost ‘aatmanirbharta’ (self-reliance) in defence including curbing imports and allocating funds for domestic procurement.

The government has imposed a phased ban on the import of 310 different types of weapons, systems and ammunition (through three positive indigenisation lists) as well as earmarked ₹84,598 crore — 68 % of the military’s capital acquisition budget — for purchasing locally produced weapons and systems in 2022-23.

“Be it guided extended range rockets for Pinaka, advanced light-weight torpedo or anti-radiation missiles, there are 43 such items in the third (positive indigenisation) list. This reflects our commitment to achieve self-reliance in the field and our confidence in the research, development and manufacturing prowess of the domestic defence industry,” the minister said.
India on Tuesday cleared indigenous defence purchases worth ₹28,732 crore including armed drones, carbines, bullet-proof jackets and ammunition.

“India ranks among the top 10 countries in the world in terms of military spending, which makes it one of the most attractive markets for defence. We believe in having a healthy mix of local endeavours and foreign collaboration in this journey of self-reliance,” he added.

FICCI senior vice-president Subhrakant Panda said the ministry should begin trials of all import substitution options available in a time-bound manner to enhance the private sector’s participation.

“Indigenisation through handholding is the way to go,” he said.

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In a historic move for the bloc, European Commission president Ursula von der Leyen announced, on 28 February, that the EU would finance the purchase and delivery of arms to Ukraine totalling €450 million.

Some countries in the bloc would also be sending fighter jets, the EU’s foreign chief Josep Borrell announced.

In another major shift, Germany has broken its long-standing foreign policy of banning all exports of lethal weapons to conflict zones.

Listed alphabetically, here is what donor countries have announced.

* Belgium – 2,000 machine guns, 3,800 tons of fuel, 3,000 additional automatic rifles and 200 anti-tank weapons.

* Canada – helmets, bulletproof vests, anti-tank weapons, ammunition.

* Croatia – €16 million worth of protective gear and light arms

* Czech Republic – 30,000 pistols, 7,000 assault rifles, 3,000 machine guns, sniper rifles, ammunition.

* Czech Republic – military equipment.

* Denmark – 2,700 anti-tank weapons, volunteer brigade.

* EU – will finance the purchase of arms for €450 mn

* Finland – 2,500 assault rifles, 150,000 rounds of ammunition, 1,500 rocket launchers, 70,000 field rations.

* France – defence equipment and fuel support.

* Germany – 1,000 anti-tank rocket launchers, 500 Stinger surface-to-air missiles, nine Howitzers, 14 armoured vehicles and 10,000 tonnes of fuel to Ukraine.

* Italy – military equipment.

* Netherlands – weapons and protective equipment, 200 Stingers

* Norway – helmets, bulletproof vests, 2,000 M72 anti-tank weapons.

* Portugal – bulletproof vests, helmets, night vision goggles, grenades and ammunition.

* Portugal – military equipment.

* Romania – fuel, body armour, helmets, ammunition, military equipment, medical treatment.

* Slovenia  – rifles, ammunition and helmets.

* Sweden – anti-tank weapons

* USA – €350 million military aid package (adds up to €1 billion over last one year).

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As per the new rules, called the Arms (Amendment) Rules, 2022, which the MHA notified on 20 January, “no further endorsement on the licence as to capacity shall be required”.

Rule 60 A (Capacity revision for new manufacturers issued a licence in Form VII) of the amended Arms rules, mentions “the new manufacturer who has been issued a licence in Form VII under these rules may apply for enhancement or restoration or re-fixation or calibre wise revision of his licensed capacity and the provisions of rule 60 shall apply mutatis mutandis to such manufacturers”.

Rule 60B (Enhanced annual production) of the rule later reads “the manufacturer who has been issued a licence in Form VII under these rules shall be permitted to have enhanced annual production of firearms or ammunition or calibre wise revision of his licensed capacity by giving intimation to the licensing authority and also to the State Government concerned within ninety days from the end of the financial year and for which no further endorsement on the licence as to capacity shall be required”.

However, it is also directed that the manufacturers shall establish online electronic connectivity under his user id with the NDAL-ALIS system of the Central government in the MHA and provide for a monthly electronic online transfer of data regarding firearms manufactured and sold or transferred and ammunition manufactured and sold or transferred or consumed for the month, as recorded in the registers.

“If any circumstances occur which prevent a licensee to submit online returns on NDAL-ALIS system referred, the local licensing authority shall be informed immediately in order to establish alternative means to submit the monthly returns,” the new Arms rules states, adding “monthly returns for the current month shall be submitted by the close of business hours of the last day of the month.”

In exercise of the powers conferred by section 44 of the Arms Act, 1959 (54 of 1959), the MHA made the following rules Arms (Amendment) Rules, 2022 further to amend the Arms Rules, 2016. As per the MHA notification, the rules come into force on the date of their publication in the Official Gazette.

The principal rules were published in the Gazette of India dated July 15, 2016, and the last amendment was done on October 9, 2020.

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