GOVERNMENT APPROVES MANUFACTURING OF AMMUNITION BY INDIAN INDUSTRY

The Government recently announced its approval of manufacturing of eight selected ammunitions for Indian Army by Indian Industry. As the indigenous manufacturer will be required to set up a new establishment for manufacture of ammunition, Defence Minister Nirmala Sitharaman has approved a long term contract of 10 years with the selected ammunition manufacturer to facilitate a viable commercial model. This marks another step in the direction of ‘Make in India’ in Defence sector and to facilitate development of indigenous capacity, reduce dependence on import and with the long-term objective of building capacity within the industry as a robust alternative source of ammunition.

As per Indian Companies Act 2013, individual Indian companies, with foreign equity not exceeding 49%, owned and controlled by resident Indian citizens, consortiums consisting of only Indian companies and wholly owned subsidiary company, are eligible to participate. The selection of manufacturer will be through an Open Tender Enquiry under two bid system. Companies can bid for any number of ammunition types, but will be awarded maximum three contracts. Prospective manufacturers will be free to select their technology partners, negotiate and obtain transfer of technology (ToT). The technology partners could be indigenous or foreign manufacturer, as per the discretion of participating entities.

Considering the ammunition requirement for India’s multifarious security commitments, even without a war on, this announcement has come better late than never. In 2015, the Comptroller and Auditor General (CAG) stated that Indian Army had no more than 20 days ammunition for war. In July 2017, the CAG report stated that there was not enough ammunition to last more than 10 days of war. For any army facing two inimical neighbours this is indeed a worrisome situation. It may be recalled that in 1999 when Pakistan precipitated the situation in Kargil, the artillery, after pounding the enemy for two months had begun to feel the pinch of shortage of ammunition.

While the 2015 CAG report red-flagged the availability of ammunition for only 20 days of war, it had alarmingly added that some types of ammunition would not last even 10 days. While the CAG blamed the functioning of the Ordnance Factory Board for the shortage of supplies to the Indian armed forces, there are a number of factors contributing towards shortfall of ammunition to the Army.

In its 2015 report, the CAG had said that the Indian Army needed more budgetary support to reach 50 percent of the target capacity of the War Wastage Reserve (WWR), meaning various military materials held in reserve in case of war. These include ammunition of all types and calibers, equipment, weapons and fuel. Ideally, the WWR should last for 40 days of intense war giving enough time to the ordnance factories for ramping up production of required ammunition and supply the same to the military. The CAG report meant that if adequate budgetary support was given, the shortfall in ammunition could be overcome by 2019 and in any case not before that. CAG’s 2017 report mentions that despite the red-flagged warning and high-level report on defence preparedness in 2015, no improvement was seen in the working of the ordnance factories and that the production and supply of ammunition remains inferior in quality and quantity so far.

The large quantities of ammunition present a problem of storage. Considering the threats to India, modernisation of its three defence services, dependency of central armed police and para military forces, etc for ammunition also from the ordnance factories, future requirements of ammunition can only be expected to increase. There are problems in storage quality too. Properly stored, bullets and shells can last for decades. But large stocks of ammunition have been found degraded and created problems when used. Ammunition management methods must be improved with innovativeness and best use of technology.

Further, red tapism and archaic bureaucratic practices have hampered defence forces over the years. According to one report, only 20 percent of the targeted ammunition was imported between 2008 and 2013 as bureaucracy kept creating hurdles. ‘Fighting to the last man and last bullet’ sounds great and Indian Army did so in 1962. But it is disgraceful for any nation to allow its army to become short of ammunition.

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