New Delhi: Down the rickety and dusty roads on the outskirts of Kanpur, a three-hour drive from Lucknow, is a new integrated ammunition factory, the largest in South Asia, that aims to cater not just to the Indian military’s requirement of small, medium and large calibre but also global demand.
Spread over 500 acres, the facility in Kanpur, part of Adani Defence and Aerospace’s Rs 3,000 crore investment in the Uttar Pradesh Defence Industrial Corridor, will also manufacture missiles going forward.
The defence sector is the new focus area for the Adani Group, whose business interests run across mining, ports, energy, airports, housing and infrastructure.
Jeet Adani, vice-president of Adani Enterprises and the younger son of Adani Group chairman Gautam Adani, told ThePrint that the conglomerate ventured into the defence sector with a long-term vision spread across the next 50-60 years.
“As a family, we remain committed to defence not just as a business sector but also keeping in mind the strategic vision of having an atma nirbhar (self-reliant) India in the area of security,” Jeet told ThePrint on the sidelines of the inauguration of the ammunition and missiles complex in Kanpur by Army chief Gen Manoj Pande and UP CM Yogi Adityanath.
The Army chief in his address said that the force has a large ammunition inventory comprising 175 variants of different calibre and type. These range from ammunition for vintage platforms to advanced precision-guided munitions. Of these, 134 ammunition variants have already been indigenised through efforts of the DRDO, defence public sector units and private industry, he said, adding many that remain are still being imported.
“However, due to production constraints, capacities and large requirements, for both operational and training needs, there exists a demand versus supply gap,” he said, ruing the fact that it becomes extremely critical in times of conflict.
Gen Pande added that given the small number of players worldwide with expertise in ammunition manufacturing and India’s competitive manufacturing cost, the industry here could have a huge advantage.
The export potential, according to one estimate, is approximately Rs 16,000 crore, he said.
As part of the plan, the Kanpur facility has started rolling out small calibre ammunition, starting with 150 million rounds — Adani Group estimates this to be 25 percent of India’s annual requirement — which will be scaled up in time.
The Adani Group plans to start the production of high calibre rounds for artillery guns next, before manufacturing the medium calibre ammunition.
This foray into the ammunition business is in addition to their existing manufacturing plant for small arms in Gwalior, besides the one for drones in Hyderabad and the one for aerospace in Bangalore.
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‘Will invest more in defence’: Jeet Adani
Jeet said that the Adani Group believes that, “in all honesty”, there would be other businesses within the conglomerate which see large growth with an eye on the pie. “But the defence (sector) will be sizable enough to get noticed. This won’t be something that will go unnoticed but will not be as big as let’s say the green hydrogen business,” he said.
“Defence would be one of the bigger growth areas within the enterprise.”
Refusing to get into specifics, Jeet said that the Adani Group plans to make big investments in the defence sector since its objective is to scale up.
“We, as a group, will be investing more in the defence sector. However, I will not like to get into specifics but I can say that it is in the thousands of crores but in single digits,” he said.
“Our family philosophy is to always have a long-term view when we get into any business. So, we look at opportunities, not in the short term but long term. What are the defence opportunities over the next 50-60 years? We cannot put a number to it right now,” he added.
Ashish Rajvanshi, CEO of Adani Defence and Aerospace, told ThePrint that it is impossible to give actual investment figures because it will depend on a whole host of issues including the government continuing with its policy of enabling private players in the defence sector and the armed forces continuing to give orders to the private sector.
“We have made a plan to invest Rs 3,000 crore into the UP Defence Corridor and this facility is part of that. This is besides the investment that we will make in other areas where we operate,” Rajvanshi said.
He said that the investment will depend a lot on orders. “Let’s assume the armed forces give an order for 100 missiles. And suddenly if they give an order for 7,000 missiles, naturally we will have to invest to quickly scale up,” he said.
Rajvanshi added that India has a defence budget of about $75 billion of which $25 billion is being spent on acquisitions.
The defence budget is expected to increase to about Rs 300 billion over the next 10 years and the Adani Group being a Tier-1 player just like TATA, Bharat Forge, L&T will play a major role besides the MSMEs, he said.
Jeet added that defence as a sector has a long gestation period but can quickly scale up. “Over the last 6-7 years, we have been working on multiple programmes and projects. I think we have reached a point now where we have multiple technologies on offer across domains,” he said.
Adani Group’s focus on ISR & MRO
Jeet and Rajvanshi said that the Adani Group has been selective in their choice of field when it comes to defence.
“Our focus is on ISR (intelligence, surveillance and reconnaissance) solutions, counter-drone systems, air defence, missiles and munitions, besides arms and ammunitions, rotary platforms and aircraft services,” Rajvanshi said.
Jeet added that the Adani Group looked at its capability to build infrastructure and budgetary plans and felt defence was a sector where it could create something extremely competitive from the business perspective while also being aligned with the country’s strategic interests.
“The areas where we have focussed are areas where we think we will have a competitive advantage and is something which is unserved,” he said, pointing out that ammunition was one such area.
Rajvanshi said that while Adani Group was looking at long-term benefits, meeting the immediate needs of the armed forces was also on the agenda.
“Let’s take the example of small arms. Could we, despite 75 years of history actually supply reliable carbines, sniper, assault rifles, light machine guns, and pistols to the Indian armed forces? The answer is no. Do we have a continuous supply of 600 million rounds of small-calibre ammunition? The answer was no. Do we have an internal supply of medium calibre or air defence ammunition, the answer was no. And hence we got into the small arms and ammunition business,” he told ThePrint.
Talking about future programmes, Jeet said the Adani Group is looking at developing unmanned systems both for ground and water. “What we call it is UGV (unmanned guided vehicles) for both underwater and surface. This will be the big focus area for us,” he said.
Rajvanshi chipped in and said that the Adani Group is also focussed on artillery guns and helicopters. Adani Defence and Aerospace will respond to a request for proposal (RFP) issued by the Army for the Mounted Gun System and will also compete for the Towed Gun System programme.
On the helicopters front, Rajvanshi said the Adani Group was looking at the Navy’s Naval Utility Helicopter (NUH) programme which remains stuck.
“But the need for the LUH (Light Utility Helicopter) remains and that is something that we would compete for,” he said.
Talking about unmanned systems, Rajvanshi said that many have spoken about the need for submarines. “But imagine that we have an unmanned vessel sitting in the ocean bed and carrying out continuous surveillance for 3-4 weeks? We are not going by the traditional way of looking at things. While those systems are also important, newer technology will make a big difference”
Asked to comment on the fact that other major players including TATA, Kalyani Group, Mahindra, and L&T, among others, will also be bidding for the programmes that Adani Group is eyeing, he said that competition is good for the country, for the consumer and also for the companies involved.
“The country benefits by getting niche systems, the consumer by getting cost-effective and faster delivery while the companies will focus on bettering technology and providing the best solution,” he said.
Rajvanshi said that the Maintenance, Repair and Overhaul (MRO) sector is another big area of focus for the Adani Group.
When one looks at the civil sector, the order for almost 500 aircraft by TATA and IndiGo will open up opportunities in the MRO sector, he added. “Earlier, these aircraft went to Dubai, Singapore and Sri Lanka for MRO but this sector will see growth in India.”
Rajvanshi added that when it comes to the defence sector, one of the biggest challenges India faced globally was the lack of spares in the global supply chain, which he said dried up due to the Russia-Ukraine war.
“So whatever was flying became grounded. So it became imperative that buying from outside is okay but in times of conflict, one is literally not able to fly their own equipment. Pick up anything from Il-76 to Mi-17 or the Su-30 fleet, everything is struggling for spares, the same is happening to the land system,” he said, adding this is an area the Adani Group is focusing on.
‘Investing in R&D, not just on assembly’
The Adani Group, said Jeet, is not merely focussed on technology transfer but also on building enough R&D capability to ensure that the next phase of any existing technology is developed in-house.
Responding to a query about claims that companies like the Adani Group are merely assembling foreign equipment without pushing for localization characterised by domestic manufacturing, Rajvanshi shot back by saying: “Sometimes, people get agitated without realising how the industry functions.”
“Today I want to make a laptop and tomorrow suddenly someone out there will say on Day 1 that the laptop was to be manufactured and on Day 10 Adani is just making the keyboard and the screen whereas the master CPU is not from Adani. Absolutely, it is not. Why do you think the Prime Minister is pushing for the semiconductor industry to be established in India?
“To answer the question. Over the last 75 years, tell me any electronics, semiconductors, big mechanical, big precision industry that came up in India, show me. So you can put an allegation on me or the country but we have to go through this roadmap to bring India bottom up so we have these capabilities.”
(Edited by Amrtansh Arora)
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