DAC clears joint venture for manufacture of AK-203 assault rifle with Russia

Union Defence Minister Rajnath Singh.

The Defence Acquisition Council (DAC), headed by the Defence Minister Rajnath Singh, has finally accorded permission for the manufacture, with Russian help, of around 670,000 AK-203 assault rifles.

A part of the Kalashnikov assault rifle family, the AK-203, a derivative of the famed AK-47, will replace the Indian Small Arms System (INSAS) rifle, designed by Armament Research and Development Establishment (ARDE) and manufactured by the Ordnance Factory Board (OFB). The INSAS rifle has been the standard infantry weapon of the Indian Armed Forces for almost three decades.

The DAC’s decision comes just days ahead of the impending visit of Russian President Vladimir Putin to India, scheduled to begin from December 5. A formal contract for the manufacture of the rifle will be signed during President Putin’s visit. The contract, which includes the payment of a fee to Russia for technology transfer, is likely to cost over Rs.5,000 crore and envisages the manufacture of the rifles under the “Make in India” initiative over a 10-year period.

The AK-203 deal has been hanging fire since 2018, when formal negotiations for the rifle first began. Prime Minister Narendra Modi even laid the foundation stone for the factory at Korwa, in Uttar Pradesh’s Amethi district. The proposal, however, had been stuck in wrangles over price negotiations, with the OFB quoting a higher price than what a direct import from Russia would have cost. The delay in the AK-203 deal had forced the Indian Army to procure 144,000 SIG716 advanced assault rifles from the United States. The SIG716 deal was signed under fast-track procedures, with the first 10,000 rifles arriving in December 2019.

The first 20,000 AK-203 rifles, each at a cost of around $1,100, are expected to arrive in a “buy off the shelf” mode from Russia, with the remaining rifles to be manufactured at the Korwa factory by the Indo-Russia Rifles Pvt Ltd (IRRPL), a joint venture between the OFB, the Russian company Kalashnikov Concern, and Rosoboronexport, Russia’s state agency for arms exports. While OFB will hold a 50.5 per cent stake in the venture, Kalashnikov Concern and Rosoboronexport will have a 42 per cent and 7.5 per cent stake respectively.