12-13 March 2018 Federation House, New Delhi. Ammunition Manufacturing in India. Knowledge Associate. Road to Self-reliance

Transcription

1 12-13 March 2018 Federation House, New Dehi Knowedge Associate Ammunition Manufacturing in India Road to Sef-reiance

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3 12-13 March 2018 Federation House, New Dehi Knowedge Associate Ammunition Manufacturing in India Road to Sef-reiance

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5 Foreword Indian Defence sector has seen a renewed focus on poicy reforms and ease of doing business under the eadership of our Defence Minister, Smt. Nirmaa Sitharaman. With a modernisation budget aocation of over USD Biion for the armed forces, Defence & Aerospace Sector undoubtedy remain at the forefront of 'Make in India' campaign of the Government of India. One area identi ed by the Ministry of Defence, which hods a tremendous opportunity for the private sector, is manufacturing high tech ammunitions indigenousy. FICCI whoe-heartedy wecomes this move, even though it has taken cose to two decades after our bitter experience during the Kargi Con ict of The Kargi war exposed our vunerabiities and brought the nation's attention to the fact that our forces acked the abiity to sustain even a short-term con ict, due to the inadequate stockpie of ammunition. The deveopment of this sector wi not ony cater to the current demand-suppy gap but aso reduce reiance on imports for critica equipment. It is worth mentioning the hitherto yeary import bi for ammunition aone is in tune of INR 50 biion! I am con dent that Indian Industry - both pubic and private, together with Ordnance Factories can surge nationa capacities and meet the ammunition requirements of armed forces indigenousy with best-in-cass technoogy. With this backdrop and to faciitate the 'Make Ammunition in India' mission, FICCI and CENJOWS have endeavoured to create AMMO INDIA the argest patform for a reevant stakehoders in this sector. AMMO INDIA being proposed as an annua feature and intends to be a forum to recommend soutions to the major impediments in Ammunition manufacturing. At the same time, it sha aso serve as a patform to showcase industry capabiities and enabe Business - to - Business (B2B) / Government - to - Business (G2B) engagements. My best wishes and sincere thanks to a the participants of AMMO INDIA Dr. Sanjaya Baru Secretary Genera FICCI

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7 Content Section A: Introduction Section B: Procurement Process Section C: Poicy and Procedures Section D: Ordnance Factory Board Section E: Indian Private Industry Section F: Expectations from FOEMs Section G: Roadmap for Indigenisation Section H: Recommendations Appendix Appendix Appendix

8 2 Ammunition Manufacturing in India Road to Sef-reiance

9 A Introduction The manufacturing of arms and ammunition is governed by the Arms Act (1959) and Arms Rues (1962). It was protected by the Government of India (GoI) and ony Ordnance Factory Board (OFB) had the icence to manufacture arms and ammunition for the Armed Forces. Indian private industry was ony aowed to produce singe barre and doube barre guns and associated cartridges. The Department of Industria Poicy and Promotion (DIPP) nay opened the manufacture of sma arms and ammunition in the private sector with ni or up to 26 percent FDI in In 2005, DIPP further iberaised the sector by issuing industria icences to a few companies to manufacture arms and ammunition. Has this regime undergone any change since then? Yes, and it has made signi cant strides in ensuring a eve paying ed for the Indian private industry. In a andmark move, the MHA revised Arms Rues 1962 (now caed as Arms Rues 2016, pubished on 15 Juy 2016) to aow Indian companies to manufacture and proof test of rearms. Subsequenty in 2017 the Arms Rues were amended again to boost the 'Make in India' manufacturing initiative. These changes have been discussed under the section Poicy and Procedures. We have aso seen a signi cant number of RFIs and RFPs issued by the MoD in the ast few years for manufacturing of arms and ammunition to the Indian private companies. The argest procurement of such initiatives was aunched by the MoD in 2017, when they reeased 8 RFPs for procurement of medium and arge caibre ammunition from the Indian private industry. The requirement for ammunition ranges from 23mm HEI/APIT for the ZU/ Strea air defence gun systems to 125mm FSAPDS for the T90/T72 tanks. So what has been the motivation for the Government and Ministry of Defence to pursue manufacturing of arms and ammunition with the private industry? At present amost 80 percent of the ammunition requirement of the Armed Forces is supported by OFB. Ammunition Factory Khadki, Ordnance Factory Ambajhari, Gun and She Factory Cossipore, etc. speciaize in sma, medium and arge caibre ammunition and exposives. Whie they continue to be the primary suppier for ammunition, OFs ack capacity to fu the entire requirement of the Armed Forces. The 2015 CAG report re ected the poor status of the ammunition stockpie-74 percent of the 170 types of ammunition faied to meet the Minimum Acceptabe Risk Leve (MARL) ¹ Press Note 2 (2002 series) DIPP ² Rue Number 51 to 66 of Chapter V - Part 1 ³ Report No. 19 of Union Government (Defence Services) Army and Ordnance Factories (Performance Audit of Ammunition Management in Army) 3

10 requirements, and ony 10 percent met the War Wastage Reserve (WWR) requirements. The CAG's 2017 report⁴ noted that "no signi cant improvement took pace in the critica de ciency in avaiabiity and quaity of ammunition." The CAG says that of a tota of 152 types of ammunition considered critica by the Indian Army to ght a war: As many as 61 types of ammunition is avaiabe for just 10 days ony Ony 31 were avaiabe for 40 days As many as 12 types of ammunition was avaiabe for 30 to 40 days As many of 26 types of ammunition was avaiabe for a itte over 20 days. In terms of private industry, there are ony two signi cant suppiers: 1. Soar Industries: founded in 1995, manufactures a compete range of industria exposives (buk and cartridge), detonators and detonating fuse and cast boosters. They have the word's argest cartridge manufacturing faciity at a singe ocation at Chakdoh, Nagpur. 2. Premier Exposives Limited: founded in 1980, has been manufacturing soid propeants from The company has been catering to the needs of tactica missies ike Astra, Akash and rockets ike Pinaka. ⁴ Report No.15 of Compiance audit Union Government Army and Ordnance Factories Reports of Defence Services 4

11 B Procurement Process Modernisation of the infantry sodier is aimed at enhancing ethaity and providing individua protection. Towards this end, procurement cases for modern weapons such as Anti-Tank Guided Missie (ATGMs), Sub Machine Gun with Ammunition, Light Machine Gun, Assaut Ri es & Under Barre Grenade Launcher (UBGL) and Cose Quarter Batte (CQB) Carbines are in progress. Cassification of Ammunition Type Diameter Range Main Weapons Sma Caibre 5.56 to 12.7 miimeter (mm) Carbine, Ri e, Light Machine Gun Medium Caibre 14.5 to 40 mm Anti-Materia Ri e, Grenade Launcher. High Caibre 73 to 155 mm Rocket Launcher, Gun, Tank Mortar Bombs ~~ Mortar Missies ~~ Tanks & Missie Launcher (Source: DGOS (OS-15) etter dated ) The management of ammunition is done by pacing ve year Ro on Indent on Ordnance Factory Board (OFB) to enabe it to pan its production. The indent is paced on mutuay agreed targets keeping the OFB capacity in view. (a) The rst ve year Ro on Indent for 2010 to 2014 was paced on OFB in February 2010 for ` 24,311 crore for 113 ammunition items. OFB produced ammunition worth ` 18,314 crore. (b) The second Ro on Indent was paced on OFB in October 2013 for projected requirement of ve year perspective pan for year 2014 to Production reports of OFB are being monitored on a monthy basis.⁵ The remaining ammunition which is not being manufactured by OFB, the Army imports through capita and revenue route. On the other hand, imports too have faied to the suppy gap as procurement has proven to be unreasonaby sow. No procurement of ammunition took pace against the nine items initiated for procurement through capita route during the period due to singe vendor situation, compexities in TOT, deay in naization of GSQR, etc. In case of revenue procurements aso, the success rate of fructi cation of contracts was as ow as 20 percent.⁶ Thus, due to deay in naization of import contracts, the buit-up of ammunition has been bady hampered. 5 Annua Report , Ministry of Defence 6 5

12 Current Status One of the argest procurement initiatives in Arms and Ammunition was aunched by the MoD ast year when they reeased eight RFPs (Appendix 1) for procurement of medium and arge caibre ammunition from the Indian private industry on 25th March The requirement for ammunition ranges from 23mm HEI/APIT for the ZU/ Strea air defence gun systems to 125mm FSAPDS for the T90/T72 tanks. After the initia reease of the RFPs the MoD decided to reease a corrigendum as eary as 1st June Since then there have been nine amendments to the submission date for extension of time. 6

13 C Poicy and Procedures The Defence procurement process for arms and ammunition has been an uphi task for the Indian Armed Forces. Whie we have seen success in many other areas ike Armoured Fighting Vehice (AVF), Missies etc. in terms of indigenous design, deveopment, and manufacturing, we are sti faiing to fu basic requirements of arms and ammunition inventory. Today amost the entire burden ies with the Ordnance Factory Board in terms of indigenous suppy for arms, ammunition and artiery. Whie Mod has taken severa steps to open this sector to private industry in the recent past, there are sti many hurdes eft to cross. DPP and DPM The procurement of ammunitions and armaments, ike everything ese in Defence sector, foows the procedures aid out in the DPP 2016 and DPM Through the DPP 2016, the GoI has made amendments to acceerate decision-making, simpify contractua and nancia provisions, and estabish a eve paying ed for the pubic and private payers. With the introduction of Indigenous Design Deveopment and Manufacture (IDDM) and enhancements to the MAKE categories, MoD has provided the right thrust to the private sector. Industria Licence The icencing is governed by two major documents which are The Arms Act 1959 and the Arms Rues The Arms Rues is a comprehensive document on pre-requisites and requirements for the manufacturing of arms and ammunitions in India. Since opening the arms and ammunition to the Indian private industry, very few companies have risen to the chaenge to acquire icenses and are in active production today. Soar Industries, Bharat Forge, L&T, Tata Power SED are a few shining exampes. The icencing poicies are managed by the MHA and DIPP. Earier, the onus was on DIPP to grant Industria License for a defence items requiring icense, it was MHA which gave the security cearance. During 2017, MHA took entire ownership of icensing, which again reverted certain responsibiities to DIPP. This has created a ot of confusion within the industry as to which is the rightfu agency to approach for any cari cations and guidance. We need a streamined poicy and a singe agency to interface with the industry and externa vendors to make headway in this regard. In a substantia step forward, MHA has amended the Arms Rues, 2016 (hereinafter referred to as the "Parent Rues") vide noti cation G.S.R. 1342(E) dated October 27, 2017, and has subsequenty brought into force the Arms (Amendment) Rues, 2017 (hereinafter referred to as 7

14 the "Amendment Rues). The Amendment Rues have been iberaised to boost "Make in India" manufacturing poicy of the Government as we as to promote empoyment generation in the ed of manufacturing of arms and ammunition. The significant amendments are 1. Vaidity of Licence: Licence wi now be vaid for ife-time 2. Approva: No prior approva from MHA for suppying sma arms and ight weapons to Centra Government or State Governments 3. Capacity: enhancement of capacity up to 15 percent of the quantity approved under icence wi not require any further approva by the Government. 4. Licence fee: This has been reduced signi canty. Earier the icence fee was Rs. 500/- per rearm which added up to very arge sums and was a deterrent to seeking manufacturing icenses. The icence fee wi now range from Rs. 5,000/- to the maximum of Rs. 50,000/-. a. The fee for manufacturing icence sha be payabe at the time of grant of icense rather than at the time of appication. 5. Appicabiity: Singe manufacturing icence wi be aowed for a muti-unit faciity within the same State or in different States within the country. Wassenaar Arrangement In a remarkabe deveopment, eite export contro regime Wassenaar Arrangement on Export Contros for Conventiona Arms and Dua-Use Goods and Technoogies, commony referred to as nd the Wassenaar Arrangement(WA) in Dec 2017 admitted India as its 42 member. This deveopment is expected to raise New Dehi's stature in the ed of non-proiferation besides heping it acquire critica technoogies. In a statement reeased by the group said, "Wassenaar Arrangement participating states reviewed the progress of a number of current membership appications and agreed at the nd penary meeting to admit India which wi become the Arrangement's 42 participating state as soon as the necessary procedura arrangements for joining the WA are competed." The decision was taken at a two-day penary meeting in Vienna. The Wassenaar Arrangement pays a signi cant roe in promoting transparency and greater responsibiity in the transfer of conventiona arms, dua-use goods, and technoogies. 8

15 More importanty, it aows for easier access to export or import of the products isted in the agreement. A ist of reevant items under the purview of the regime have been summarised in Appendix 2. FDI Poicy FDI poicy appies to any organization that is ooking for estabishment of branch office, iaison office, project office or any other pace of business in India. If the principa business of the appicant is Defence, approva of Reserve Bank of India is not required in cases where Government approva or icense/permission by the concerned Ministry/Reguator has aready been granted. In May, 2001, the Defence Industry sector, which was hitherto reserved for the pubic sector, was opened for Indian private sector participation, with Foreign Direct Investment (FDI) up to 26 percent, both subject to icensing. Recenty, Department of Industria Poicy & Promotion - Ministry of Commerce & Industry vide Press Note No. 5 (2016 Series), has aowed 100 percent FDI. As per the extant FDI poicy, foreign investment of up to 49 percent is permitted under automatic route, and above 49 percent through government approva wherever it is ikey to resut in access to modern technoogy or for other reasons to be recorded. The atest reease in August 2017 of the FDI poicy aows the foowing investment in Defence sector 49 percent is automatic approva percent aowed with Government approva Other Conditions ⁷ as per the most recent press note are as foows: Infusion of fresh foreign investment within the permitted automatic route eve, in a company not seeking industria icense, resuting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, wi require Government approva. Licence appications wi be considered and icences given by the Department of Industria Poicy & Promotion, Ministry of Commerce & Industry, in consutation with Ministry of Defence and Ministry of Externa Affairs. Foreign investment in the sector is subject to security cearance and guideines of the MoD

16 Investee company shoud be structured to be sef-sufficient in areas of product design and deveopment. The investee/joint venture company aong with manufacturing faciity, shoud aso have maintenance and ife cyce support faciity of the product being manufactured in India. Key enabers of the FDI poicy 100 percent FDI in defence sector : FDI upto 49 percent under Automatic route Requirement of singe argest Indian ownership of 51 percent of equity is removed 03 years of ock in period for equity transfer has been aboished FDI in defence sector is aso subject to industria icense under the Industries (Deveopment & Reguation) Act, 1951 and the Arms Act 1959 for manufacturing of arms and ammunition. 10

17 D Ordnance Factory Board Ordnance Factory Board is a congomerate of 41 Ordnance Factories(OF), 9 Training Institutes, 3 Regiona Marketing Centres and 4 Regiona Controer of Safety which functions under the Department of Defence Production. Its primary objective is to achieve sef-reiance in equipping the armed forces with state-of-the-art batte ed equipment. OFB has indigenized a wide range of sma, medium and high caibre ammunitions over the ast few decades. Their product ist incudes but is not restricted to the foowing ammunition:- Sma Caibre Medium Caibre Large Caibre Cartridge SA for 9mm, 5.56mm, 7.62mm Cartridge for 14.5mm, 23mm, 30mm and 40mm 84mm TPT, SHELL 105 mm IFG HE, MAIN BATTLE TANK AMMUNITION 120 mm FSPADS, SHELL 155 mm ILLUMINATING MIRA Research & Deveopment (R&D) is being cutivated at OFB in a structured manner since 2006 with the estabishment of 13 Ordnance Deveopment Centres (ODCs). With the assistance of premier academic institutions ike IITs at Mumbai, Kanpur and Kharagpur, to name a few, the Ordnance Factories are not ony upgrading existing products but aso deveoping new weapon patforms. OFB has taken up R&D projects in the domains of Product Deveopment/ Upgrade, Indigenisation, Import substitution and Process Deveopment. OFB has deveoped major weapon patforms, arms and ammunition and approximatey 22 percent of the turnover of OFB is from products deveoped indigenousy by Ordnance Factories. OFB is presenty deveoping Upgraded BMP-II, Futuristic Infantry Combat Vehice (FICV), Air Defence Gun and 155mm x 52 Ca Mounted Gun System and reated ammunitions and Eectronic Fuzes. 11

18 E Indian Private Industry To achieve the goa of sef-reiance in the Defence sector, continuous efforts are being made to increase in digenization, wherever technoogicay feasibe and economicay viabe. With the said changes and amendments in various poicies, the Indian private industry is keen on supporting the requirement of the Armed forces and the Make in India vision. Post iberaisation of the defence sector in 2001 and further amendments in 2006, there is yet to be any signi cant manufacturing deveopment that has taken pace in the private industry on arms and ammunition. A ist of companies with industria icence to manufacture arms and ammunition is provided in Appendix 3. Few notabe companies have begun investing into this sector. For exampe, Punj Loyd has setup a faciity in Maanpur in The pant, a joint venture with Israe Weapon Systems, wi produce four products - X95 carbine and assaut ri e, Gai sniper ri e, Tavor assaut ri e and Negev Light Machine Gun (LMG). Bharat Forge Limited, a subsidiary of Kayani Group, have a joint venture company - BF Ebit Advanced Systems Private Limited, formed in 2012 to manufacture artiery, mortars, and mine protected vehices in India. Yet, even with a these companies having Industria Licence for manufacturing arms and ammunition, not a singe order has been paced with any of the rms. With a the poicy changes and amendments in favour of the Indian private industry, the new entrants wi sti have to tacke the foowing chaenges: Technoogy Licencing Infrastructure Security Skied manpower Proof Testing 12

19 F Expectations from FOEMs The fact that India ranks amongst the top ten countries in the word in terms of its miitary expenditure, makes it one of the most attractive markets for defence. This makes it a nobrainer for any foreign origina equipment manufacturer (FOEM) that India shoud be on their customer ist. Having said that, GoI has an agenda to reduce import dependence in defence by percent⁸ and it is activey promoting indigenous defence manufacturing with initiatives ike 'Make in India' and poicy reforms incuding aowing 100 percent FDI. As a resut, the roe of FOEMs is shifting from direct exporters to that of partners in co-deveopment and production. The roe of FOEM woud be that of a technoogy partner to the Indian company. As of date, no Indian private company has produced ammunition for the armed forces. By partnering with Indian companies, FOEMs have the bene t of winning orders through the Buy (IDDM) and Make routes. Further, setting up a Joint Venture wi enabe FOEMs to enjoy economies of scae, and ower abour cost. The FOEM can ook at export potentia once the Indian company is fuy-operationa and is abe to provide a cost advantage vis a viz their current manufacturing operations outside India. Severa overseas defence companies, such as Expa of Spain, Nexter of France, Rosoboronexport of Russia, Chemring Group of the United Kingdom, Saab of Sweden, Ebit of Israe, Rheinmeta Defence of Germany, Dieh Defence of Germany, Dene of South Africa, Yugoimport of Serbia, Bumar of Poand, Orbita ATK Armament Systems of the United States and Arsena of Bugaria, are/were in taks with private Indian companies to provide cuttingedge technoogy for mutipe Indian ammunition programs

20 G Roadmap for Indigenisation We have seen a ot enthusiasm from the industry in the arms and ammunition space for the ast coupe of years. MoD has been stating the need for private industry participation to fu the requirements of the Armed forces. We need to capitaise on this fervour before interestwanes from the Indian industry. Roe of Government The GoI shoud ceary state the percentage of Indigenous Content (IC) in ammunition manufacturing from past experience.in the case of INSAS ri e, which was designed by DRDO and manufactured by Ri e Factory Ishapur, it is said to have 100 percent IC. There were mutipe design iterations and signi cant funding required before deveoping a product ike INSAS. Hence the GoI cannot expect the same eve of IC from the private industry from the word go. Exposives and ammunition ing are the most critica processes in ammunition manufacturing. A few ordnance factories have estabished themseves in exposive ing. If we ook at sma caibre ammunition the she needs to attain the desired spin and kinetic energy upon reease. The ing needs to be precise enough to ensure a) the buet does not expode within the barre and b) that the buet gets the requisite kinetic energy when it eaves the barre. Since the private industry is going to take up these manufacturing processes, making the exposives and the ing process are going to be some of the crucia technoogies. Today the private industry might not have compete access to DRDO. GoI shoud aso provide access to research done by DRDO on arms and ammunition so that the private industry can understand, earn, and impement these processes in their own faciities. The Government shoud aso assist the private industry in terms of infrastructure (Pant and machinery, security of faciity, proof testing of arms and ammunition) setup. A ot of the machines required for ammunition manufacturing woud have to be imported from countries ike Russia or Germany. There coud be reaxed taxation on imports of such machinery. Keeping a these in mind, GoI needs to decide on the IC percentage expected from the Indian private industry. If are to go by IDDM category of DPP 2016, then a 60 percent IC content shoud be the recommendation from the Government. 14

21 Roe of Private Industry Barring a sma handfu of companies, the private industry has no experience in manufacturing miitary grade arms and ammunition. Design deveopment and manufacturing was restricted to the DRDO abs and OFB based on the earier government poicies. Of ate the MoD has reaised the capacity crunch with the OFB and is ooking towards the private industry to fu the requirements of the Armed Forces. Taking everything into consideration the industry must strive for percent IC as their na goa, (Even as GoI or RFP might state 60 percent IC). The industry shoud aso try and create the manufacturing eco-system so that a the machining and nishing operations can be indigenised to begin with. Exposive reated processes coud be taken up graduay as they absorb the technoogy and understand the product and manufacturing processes. An anaysis of the compete suppy chain and processes invoved in manufacturing of ammunition is required to identify areas of strength within the country. This wi aso provide a means to assess the kind of investment required. Another crucia factor woud be incusion of tier II and tier III manufactures of the Indian company into the ammunition manufacturing suppy chain, assuming they wi not be a fuy integrated manufacturing setup. 15

22 H Recommendations MoD Reduce procurement ead times: Mutipe RFIs and RFPs have been issued in the past with no resut in the arms and ammunition category. RFP must outine compete roadmap: It woud not suffice to simpy issue RFPs excusive to private industry. Compete roadmap for an ammunition RFP shoud be outined, one with hand-hoding and guidance to the private industry from the GoI, (incuding agencies ike the DGQA, the end user and DRDO). Long-term covenant: shoud be part of any proposa for ammunition manufacturing, once you pace an order on a company then for next 10 years they woud be the source for that product (in order to get ROI on infrastructure investment). Industria Licence Licencing process shoud be streamined: v v DIPP has an onine process now but MHA (which issues icence for sma arms and ammunition) is an offine process. Documents required need to be ceary stated, since the documents stated on the site and forms do not seem to suffice. Estabish an Ombudsman for Industria Licence: Reguar feedback mechanism and intimation to the industry on detais acking in their appication and we as status. Private Industry Lack of design and R&D within the private sector, sti eaves us dependent on foreign OEMs for ToT. Not-withstanding the fact that this sector was not open to the private industry, there needs to be more than just intent from the companies to fructify arms and ammunition manufacturing and address the needs of the Armed Forces. 16

23 Appendix 1 : List of RFPs issued by the Indian Army to procure ammunition from Indian industry Reference Number Description Equipment QTY (yeary for 10 years) A/18129/MAPI/23MM 23mm HEI/APIT (high ZU-23 air 5,00,000 /OS AMN PROC -exposive incendiary defence guns /armour-piercing incendiary tracer) ammo A/18107/30MM HEI 30mm HEI/T (high BMP-2 infantry 1,88,600 HET/MAPI/OS AMN -exposive incendiary combat vehices PROC - tracer) ammo A/18153/30MM 30mm VOG 17 30mm Automatic 5,00,000 VOG17/MAPI/OS Grenade Launcher AMN PROC A/18106/BMCS/ BMCS (ow zone Howitzer 1,00,000 HZLZ/MAPI/ OS and high zone) AMN PROC A/18114/MAPI/ 125 mm FSAPDS Tank T90 / T72 20, MM/FSAPDS /T/OS AMN PROC A/18120/40MM/ 40mm MGL/UBGL mutipe grenade 3,00,000 MGLUBGL/M API (mutipe grenade auncher/under /OS-AMN PROC auncher/under barre grenade barre grenade auncher auncher) ammo. A/18138/ mm HE ER Rocket 5000 ERROCKET/MA PI /OS AMN PROC A/18231/ELECT Eectronic Fuzes Artiery gun 4,99,400 FZ ARTY/MAPI/ systems OS AMN PROC (Source: eprocure.gov.in) 17

24 Appendix 2 : Munitions List of the Wassenaar Arrangement December 2017 ML1. Smooth-bore weapons with a caibre of ess than 20 mm, other arms and automatic weapons with a caibre of 12.7 mm (caibre 0.50 inches) or ess and accessories, as foows, and speciay designed components therefor: a. Rifes and combination guns, handguns, machine, sub-machineand voey guns b. Smooth-bore weapons as foows: 1. Smooth-bore weapons speciay designed for miitary use; 2. Other smooth-bore weapons as foows: a. Fuy automatic type weapons; b. Semi-automatic or pump-action type weapons c. Weapons using caseess ammunition ML2. Smooth-bore weapons with a caibre of 20 mm or more, other weapons or armament with a caibre greater than 12.7 mm (caibre 0.50 inches), projectors and accessories, as foows, and speciay designed components therefor: a. Guns, howitzers, cannon, mortars, anti-tank weapons, projectie aunchers, miitary fame throwers, rifes, recoiess rifes, smooth-bore weapons and signature reduction devices therefor b. Smoke, gas and pyrotechnic projectors or generators, speciay designed or modified for miitary use c. Weapons sights and weapon sight mounts, having a of the foowing: 1. Speciay designed for miitary use; and 2. Speciay designed for weapons specified in ML2.a d. Mountings and detachabe cartridge magazines, speciay designed for the weapons specified in ML2.a ML3. Ammunition and fuze setting devices, as foows, and speciay designed components therefor: a. Ammunition for weapons specified by ML1., ML2. or ML12.; Fuze setting devices speciay designed for ammunition specified by ML3.a 18

25 Appendix 3 : List of companies with Industria Licence to manufacture arms/ammunition (not exhaustive) Company Licence Description INDTECH SMALL ARMS & AMMUNITION VIZ: 5.56 MM, 7.62 MM, 9 CONSTRUCTION PVT. LTD MM, 12.7 MM& 14.5 MM CALIBRES ONLY LARSEN & TOUBRO LTD, MUMBAI VEM TECHNOLOGIES PVT. LTD SEC INDUSTRIES PRIVATE LIMITED HYT ENGINEERING COMPANY PVT. LTD GODREJ & BOYCE MANUFA CTURING COMPANY LTD. M/S LORDS VANIJYA PVT. LTD. M/S M ICRON INTRUMENTS PVT. LTD. ARMAMENT INCLUDING AMMUNITION/ORDINANCE LIKE MISSILES, ROCKETS, TORPEDO LAND/NAVAL MINES, DEPTH CHARGES INCLUDING ASSEMBLY, INTEGRATION & CHECKOUT OF ARMS AND AMMUNITIONS (ROCKET AND MISSILES) STATIC AND MOBILE LAUNCHERS FOR AIR LAUNCH MISSILES (SHORT, MEDIUM AND LONG RANGE), ROCKETS, BOMBS & AMMUNITIONS AND PTAS BOTH LAND AND SHIP BASED INCLUDING THEIR SUB-SYSTEMS AND UPGRADES MANUFACTURE OF SHELLS FOR AMMUNITION (VARIOUS CALIBER SIZES) EMPTY SHELLS AND REQUIRED FUSES FOR AMMUNITION AND EXPLOSIVES SUCH AS BOMBS, MINES, MISSILES & TORPEDOES, EXCLUDING THE FILLING OF EXPLOSIVE MANUFACTURE AND ASSEMBLY OF AMMUNITION, EMPTY FUZES, PRIMERS AND SWITCHES (i). WEAPON SYSTEMS SUCH AS MORTARS, ROCKET LAUNCHERS, GRENADE LAUNCHERS AND MISSILE LAUNCHERS (ii). AMMUNITION FOR ANTI-AIRCRAFT GUNS, ARTILLERY GUNS, TANK GUNS MORTARS ETC. (iii). ROCKETS, GRENADES, MISSILES, AIRCRAFT BOMBS OF VARIOUS TYPES, (iv). SUB-ASSEMBLIES FOR WEAPON SYSTEMS 19

26 Company Licence Description (iv). SUB-ASSEMBLIES FOR GRENADES, ROCKETS, AIRCRAFT BOMBS, MORTAR BOMBS, ARTILLERY SHELLS AND MISSILES M/S PREMIER DESIGN, DEVELOPMENT, UPGRADE, REFURBISHED AND EXPLOSIVES LTD. PRODUCTION OF READY TO USE AMMUNITION OF 40 MM AND ABOVE CALIBRE, a. PRODUCDTION OF AMMUNITION FIRED FROM ARTILLERY, TANKS, HELICOPTERS, AIRCRAFTS AND NAVAL CRAFTS (EXCLUDING SMALL ARMS AMMUNITION) [10,00,000 Nos. Annuay] 2. DESIGN, DEVELOPMENT, FEFURBISHMENT AND UPGRADE OF READY TO USE ROCKETS AND MISSILES. a. ROCKETS [1,00,000 Nos. Annuay] b. MISSILES(TACTICAL) [1,00,000 Nos. Annuay] ZM/S. BF ELBIT ADVANCED SYSTEMS PVT. LTD. MANUFACTURE OF (a) GUNS, HOWITZERS, MORTARS, PROTECTED TACTICAL VEHICLES (b) AMMUNITION INCLUDING SMART BOMBS AND READY-TO-FILL SHELLS EXCLUDING FILING M/S. SOLAR INDUSTIRES DESIGN, DEVELOPMENT, UPGRADE, REFURBISHED AND INDIA LIMITED PRODUCTION OF READY TO USE AMMUNITION OF 40 MM AND ABOVE CALIBER PRODUCTION OF (A) AMMUNITION FIRED FROM ARTILLERY, TANKS, HELICOPTERS, AIRCRAFTS AND NAVAL CRAFTS (EXCLUDING SMALL ARMS AMMUNITION). (B) DESIGN, DEVELOPMENT, UPGRADE, REFURBISHMENT AND UPGRADE OF READY TO USE ROCKETS AND MISSILES a. ROCKETS b. MISSILES (TACTICAL) 2. FILLED FUZES FOR ARTILLERY SHELLS, MORTAR BOMBS, MISSILES, GRENADES AND SIMILAR MUNITION OF WAR 20

27 Company M/S. KALYANI STRATEGIC SYSTEMS LIMITED (KSSL) Licence Description MANUFACTURE, MAINTENANCE AND OVERHAUL OF THE FOLLOWING ITEMS:- (i) AMMUNITION AND FUZE SETTING DEVICES. (ii) BOMBS, TORPEDOES, ROCKETS, MINES, MISSILES, DEPTH CHARGES, DEMOLITION CHARGES, DEMOLITION DEVICES, DEMOLITION KITS, AIRCRAFT MISSILE PROTECTION SYSTEMS. (iii) ENERGETIC MATERIALS AND RELATED SUBSTANCES. (iv) HIGH VELOCITY KINETIC ENERGY WEAPON SYSTEMS AND RELATED EQUIPMENT. (v) DIRECTED ENERGY WEAPON (DEW) SYSTEMS, RELATED OR COUNTERMEASURES EQUIPMENT AND TEST MODELS. HIMACHAL FUTURISTIC COMMUNICATIONS LIMITED MANUFACTURE OF AMMUNITION AND FUZE SETTING DEVICES INCLUDING THE FOLLOWING:- (i) SAFING AND ARMING DEVICES, FUZES, SENSORS AND INITIATION DEVICES; (ii) POWER SUPPLIES WITH HIGH ONE TIME OPERATIONAL OUTPUT; (iii) COMBUSTIBLE CASES FOR CHARGES; (iv) SUBMUNITIONS INCLUDING BOMBLETS, MINELETS AND TERMINALLY GUIDED PROJECTILES. CONTINENTAL DEFENCE SOLUTIONS PVT. LTD SHAN ARMS INDUSTRIES PRIVATE LIMITED MOUNTED GUN SYSTEMS AND THEIR AMMUNITIONS ONLY, AMMUNITION & FUZES, AIR DEFENCE GUNS, LOITERING MISSILE SYSTEM, WEAPONS & AMMUNITION MEDIUM CALIBERS AMMUNITION (i) 14.5 MM (ii) 16 MM (iii) 23 MM (iv) 30 MM (v) 40 MM 21

28 Company Licence Description HIGH CALIBERS AMMUNITION (i) 73 MM (ii) 76.2 MM (iii) 84 MM (iv) 105 MM (v) 125 MM AND ABOVE PIPAVAV DEFENCE AND OFFSHORE ENGINEERING COMPANY LTD. MANUFACTURE OF ASSEMBLY AND TESTING OF ALL CALIBERS OF AMMUNITION RANGINING FROM 20 MM TO 203 MM FOR THE INDIAN ARMED FORCES (Source: DIPP ist of Industria Licences issued between Jan 2001 and Jun 2016) 22

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32 About FICCI Estabished 90 years ago, FICCI is the argest and odest apex business organiza on in India. Its history is cosey interwoven with India's strugge for independence, its industriaiza on, and its emergence as one of the most rapidy growing goba economies. A n o n - g o v e r n m e n t, n o t- f o r- p r o fi t organiza on, FICCI is the voice of India's business and industry. From infuencing poicy to encouraging debate, engaging with poicy makers and civi society, FICCI ar cuates the views and concerns of industry, reaching out to over 2,50,000 companies. FICCI serves its members from arge (domes c and goba companies) and MSME sectors as we as the pubic sector, drawing its strength from diverse regiona chambers of commerce and industry. The Chamber with its presence in 14 states and 10 countries provides a pa orm for networking and consensus-buiding within and across sectors and is the first port of ca for Indian industry, poicy makers and the interna ona business community. About CENJOWS CENJOWS was raised at the ini a ve of Ministry of Defence on 24 Aug 2007 and is registered under 'The Socie es Registra on Act 1860'. The centre has been set up to: n n n Rise above sectora and departmenta egacies, and examine joint warfare and synergy issues in their en rety. Provide the much-needed interface between various stakehoders, viz the government, pubic and private sector, academia, NGOs and civi society. Ini ate debates and discussions in an independent and unbiased miieu for emergence of best possibe aterna ve. Mission To promote Integra on as a synergis c enaber for the growth of Integrated Na ona Power and provide aterna ves in a dimensions of its appica ons through focused research and debate. Federation of Indian Chambers of Commerce and Industry (FICCI) Federation House, 1, Tansen Marg, New Dehi E: v.vaidhyanathan@ficci.com vivek.pandit@ficci.com T: /384 F: W: