Modi, Putin discuss Afghanistan; India flags terror concern at BRICS, UNHRC

Days ahead of Putin’s visit, deal to jointly manufacture rifles in India gets DAC nod

India News


The Defence Acquisition Council (DAC) has finally cleared a long-pending proposal for a deal to manufacture six lakh AK-203 assault rifles for the Indian Army jointly with Russia, sources confirmed. The deal had been stuck over several points for nearly two years, including negotiations over technology transfer.

The DAC also cleared a proposal to acquire two satellites for the Air Force to help them communicate beyond the line of sight.

To be manufactured by the Indo-Russian Rifles Pvt Ltd based in Amethi, the deal is expected to be around Rs 5,000 crore and the final approval comes just weeks ahead of Russian President Vladimir Putin’s visit to India in the first week of December. The deal is likely to be signed in his presence.

AK-203 assault rifle.

The deal is a part of the Inter-Government Agreement with Russia, under which the first 70,000 rifles will be off-the-shelf, after which the transfer of technology for the guns to be made in India will start.

Russia had earlier demanded royalty over each gun to be manufactured in India, however, the clause was waived by them. There were a few other issues that had been stuck in negotiations, which have largely been sorted out.

The production of the guns will begin next year, and the first indigenously made rifles are likely to be delivered within 32 months once the production starts. The new assault rifles will replace the indigenously manufactured Indian Short Arms System (INSAS) rifles. Over the last two years, the government had to place an order for nearly 1.5 lakh American Sig Sauer rifles to meet the shortfall of guns available with the armed forces.

The joint venture was between Russia’s Kalashnikov and India’s Ordnance Factory Board (OFB). But after OFB ceased to exist earlier this year, creating seven new Defence Public Sector Undertakings (DPSUs), the venture will now be with Advanced Weapons and Equipment India Limited.


However, the statement issued by the Defence Ministry regarding the meeting was quiet on the deal. It stated that the DAC chaired by Defence Minister Rajnath Singh accorded Acceptance of Necessity (AoN) for one Capital Acquisition proposal of Indian Air Force for its modernisation and operational needs amounting to Rs 2,236 crore for procurement of proposals for GSAT-7C Satellite and Ground Hubs for real-time connectivity of Software Defined Radios (SDRs).

“The project envisages complete design, development and launching of satellites in India,” the statement said. The deal will be for two satellites which along with the ground hubs and SDRs “will enhance the ability of our Armed Forces to communicate beyond Line of Sight (LoS) among one another in all circumstances in a secure mode”.



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