India, Russia close to sealing AK-203 deal

Updated on Nov 24, 2021 01:54 AM IST

The project envisages the production of up to 700,000 AK-203 assault rifles. All outstanding issues relating to cost and indigenous content in the weapons have been ironed out and the Union defence ministry is looking at an early conclusion of the deal, an official said.

The defence ministry on Tuesday gave its final clearance to the proposed deal. In picture - Union defence minister Rajnath Singh.(PTI File Photo)
The defence ministry on Tuesday gave its final clearance to the proposed deal. In picture - Union defence minister Rajnath Singh.(PTI File Photo)
By, , Hindustan Times, New Delhi

India is working towards concluding a 5,100-crore deal with Russia to jointly manufacture AK-203 assault rifles at a facility in Uttar Pradesh’s Amethi ahead of Russian President Vladimir Putin’s visit to India next month for an annual summit, officials familiar with the matter said on Tuesday.

The defence ministry on Tuesday gave its final clearance to the proposed deal, HT has learnt.

The joint venture between Kalashnikov and a new weapons manufacturing division carved out of the erstwhile Ordnance Factory Board (OFB) seeks to provide a push to the government’s Atmanirbhar Bharat Abhiyan (self-reliant India campaign).

The project envisages the production of up to 700,000 AK-203 assault rifles. All outstanding issues relating to cost and indigenous content in the weapons have been ironed out and India’s defence ministry is looking at an early conclusion of the deal, one of the officials cited above said.

“There are no pending issues and the Amethi facility is ready to kick off production next year after the deal is signed,” said another official. Both officials declined to be named.

In August 2020, the defence acquisition council (DAC) – India’s apex military procurement body – granted some key approvals to accelerate the acquisition of AK-203 assault rifles to be made in India with transfer of technology from Russia.

The government has taken a raft of measures to boost self-reliance in the defence sector over the past two years. These include raising foreign direct investment in defence manufacturing, creating a separate budget for buying locally made military hardware and notifying 209 defence items, including assault rifles, which cannot be imported.

India set aside 70,221 crore this year for domestic defence procurement, accounting for 63% of the military’s capital budget. Last year, the ministry spent more than 51,000 crore, or 58% of the capital budget, on domestic purchases.

Last month, Prime Minister Narendra Modi dedicated to the nation seven new defence companies carved out of OFB. He said these entities will play a critical role in helping the country cut down military imports in line with the vision of Atmanirbhar Bharat. One of those units, Advanced Weapons and Equipment India Limited, will be involved in manufacturing the AK-203 rifles.

Putin’s two-day visit to India for the annual summit, expected to be held on December 6, will have a major defence and security overhang. The delivery of the first squadron of S-400 air defence systems – part of a $5.4-billion contract with Russia for five systems – is expected to coincide with Putin’s visit.

India and Russia are also expected to renew their military-technical cooperation arrangement for the period 2021-31 and sign several defence-related agreements during the summit, people familiar with planning for the meeting said on condition of anonymity. A key pact that could be inked is the Reciprocal Exchange of Logistics Agreement (RELOS), which will allow militaries of the two nations to access logistics and support facilities at each other’s bases.

India is also looking at the acquisition of additional Su 30-MKI and MiG-29 combat jets and 400 more T-90 tanks from Russia.

The maiden India-Russia 2+2 dialogue of defence and foreign ministers, which was earlier to be held during November, is now expected to be held around the same time as the annual summit. The developments in Afghanistan and related challenges such as terrorism and drug trafficking are expected to figure in the 2+2 dialogue.

India currently has 2+2 dialogues only with the US, Australia and Japan.

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