Reliance Defence and Engineering has considered to joint venture with Kalashnikov Israel for manufacturing Kalashnikov class of weapons for Indian armed forces.
Kalashnikov Israel, a subsidiary of the CAA Company of Israel, has agreed to jointly make Kalashnikov and other small arms with Reliance Defence. The manufacturing facility could come up at the Pipavav shipyard in Gujrat state of India, BusinessLine reported Monday.
Reliance Defence will hold 51 per cent stake in the joint venture, while the rest of the stake will be held by Kalashnikov Israel. The tie-up could be formalised during the ongoing visit of Israeli President Reuven Rivlin, Industry sources said.
The small arms requirement from the three armed forces, paramilitary forces, and states police is in the range of about two million units over the next 10 years. With such a large requirement of the weapons, the potential market size is about 6,000 crore rupees (US$886.2 million).
It is expected that more than 80 per cent of the weapon requirement for the forces will be assault rifles and carbines, whereas the balance will be for pistols and other weapons.
India had notified Small Arms Act 2016 in July. As per the new rules, a licensing committee within the Ministry of Human Affairs (MHA) has to approve the grant of Licence for Small Arms and Ammunition to the Private Sector Companies.
However, the licensing process could take over six months for Reliance Defence, sources said.
The Kalashnikovs and other guns would be made under the Indigenously Designed Developed and Manufactured (IDDM) category introduced in Defence Procurement Policy 2016.
Attempts would be made by Reliance Defence to indigenise the manufacturing process to over 60 per cent, which will also meet the Make in India and Skill India programmes, the official added.
The share of AK 47 rifle and its variants are almost 20 per cent of the estimated 500 million firearms available worldwide, the official added.
There are possibilities that both the companies could possibly collaborate on upgrading and refurbishment of old weapons such as 30 Springfield rifles, which are still being held in large quantity by Central and State Police forces, sources added.