In a bid to promote ‘atmanirbharta’ within India’s small arms manufacturing industry, the Narendra Modi government has initiated a fresh process to procure carbines to replace its decades-old 9mm British Sterling 1A1 submachine guns—a project that began in 2008. The Ministry of Defence gave Acceptance of Necessity (AoN), the first step in any defence procurement process, to the plans to induct approximately four lakh of these weapons. And the administration is correct. This is a mega deal for the industry and would ensure that Indian companies benefit.
While the defence ministry remains tight-lipped on whether the procurement will take place through the Buy Indian category or the Indigenously Designed, Developed and Manufactured (IDDM) route, sources in the defence and security establishment told ThePrint that it would be through the former. Under IDDM, the competition would have been between only three firms, out of which the Bengaluru-based SSS Defence, which has come out with an indigenous carbine called the M72, would be the only private firm. The other two in competition would have been the Defence Research and Development Organisation (DRDO) and the Ordnance Factory Board.
But the good thing about the Buy Indian category is that it opens up the competition to include those companies that have set up plants in India or are in the process of doing so in collaboration with a foreign Original Equipment Manufacturer (OEM). For example, PLR Systems, now part of the Adani Group, has a tie-up with the Israeli Weapons Industry (IWI) and are already manufacturing its small arms with a ‘Made in India’ tag on them.
There are other companies too, which have already tied up with a foreign OEM, have either set up plants or are in the process of doing so. This includes the Kalyani Group, which has a tie-up with French firm Thales but is also in talks with the DRDO; the Jindal Group, which has tied up with a Brazilian firm called Taurus and Neco Desert Tech, a joint venture between Indian and American firms.
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The process matters
This is where India must draw a line. The Request for Proposal (RFP), also known as a tender, should mention that such companies would be given preference. It cannot be a global RFP where multiple companies across the world offer their product and say they will invest in India after bagging the contract. This would be unfair to firms who have already invested their money and time to set up a manufacturing facility and have been waiting for orders.
SSS Defence is one such example. It has an array of small, indigenous arms products but is yet to get any order from the Services or the police forces. But that’s a given, since they have to bid and compete, which they are doing with multiple police forces trying out their systems. The indigenous firm, which has worked closely with various Indian security agencies to finetune their weapon, could bag a contract.
Another example is PLR Systems, which is locally manufacturing the best Israeli weapons in India that the Armed Forces and even state police use. Those weapons were bought when the joint venture didn’t exist but any follow-up order for the contracts already inked in the past by the Army has to still go to the Israeli company.
As reported earlier, this is because if an order is given to PLR Systems, the name of the company changes and that would mean a fresh procurement process. So the Armed Forces give fresh orders to IWI directly, which manufactures the weapons in Israel and sends them over to India.
The Army is inducting the IWI-supplied LMGs, even when the joint venture is capable of manufacturing it indigenously with many elements ‘Made in India’. So what does PLR Systems do in the meantime? Apply for fresh tenders and wait.
PLR Systems is likely to field the Galil Ace 21 carbine that is now manufactured in India. Interestingly, the Ace 21 was chosen by the Army in an earlier attempt (2013-14) to buy carbines but the deal could not go through because of a single vendor situation, a condition that does not allow going ahead, under the Indian defence procurement rules. It is therefore important to incentivise companies who have already invested in India for the carbine deal.
It is natural that with the news of India planning to procure nearly four lakh carbines, many foreign and domestic companies would be in frenzy to announce tie-ups. But their actual investment and work will depend on whether they bag the contract or not. So it would be completely unfair to pit companies who have already invested and manufactured arms here against global players who have not done so.
Views are personal.
(Edited by Srinjoy Dey)