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As economies slump amid global conflicts, this market in Nagpur booms
Countries from Europe and West Asia continue to stockpile arms and ammunition in record numbers. Major beneficiaries are defence PSUs and private players.
Explosives and ammunition manufacturing units in Nagpur are registering record number of sales and profits as exports are on the rise during a period of global uncertainty plagued by wars in West Asia and Ukraine, said a report by The Times of India.
Buyers from countries like Bulgaria, Spain, Germany, South Africa, Poland, Vietnam, Brazil and Saudi Arabia are reportedly stockpiling by buying ammunition in record numbers from Nagpur, informally called as India's explosives capital.
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According to the report, 155 mm calibre shells used in howitzer guns and 40 mm shoulder fired rockets are among the items in top demand. Sources told TOI that order around ₹9,000 crore have been dispatched in the last three months and orders worth at least ₹3,000 crore is under execution. A similar revenue is expected from the sales of raw explosives powder as well.
Surprisingly, the countries stocking arms and ammunition are not a part of any active conflict around the world. But sources speaking to TOI noted that the final destination of these could be elsewhere.
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Hence, the industry is making sure that these are not deployed in active wars in any part of the world. The central government is issuing the license to these manufacturers based on end-use certificates issued by the buyers, which reassure that the arms and ammunition are for their own consumption only.
“No, we aren't supplying even a single round of ammo to any nation at war,” a manufacturer insisted. Hence, India is not profiteering from wars, the manufacturers add. Industry sources speaking to TOI also noted that exports are banned to “certain countries” due to India's geo-political equation.
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The beneficiaries
Companies benefitting out of this boom include mid-size ancillary units to defence public-sector undertakings (PSU)'s. These include Yantra India Ltd (YIL), a PSU formed out of the Ordnance Factory and Munitions India Ltd (MIL). The latter has ordnance factories at Chandrapur and Bhandara.
Nagpur based companies are also catering to high-energy raw materials too. Solar Industries, a private player is one of the major players in this category alongside MIL. According to the report, export filings of several private players with the government show sizeable export of such raw materials to arms companies across Europe, Far East and West Asia.
The Ministry of Commerce maintains district-wise export figures. Nagpur has exported bombs worth ₹770 crore in the quarter from April'24 to June'24 and neighbouring Chandrapur has exported bombs worth ₹458 crore in the last fiscal year.
