Soon, private firms may get entry into ordinance sector

NEW DELHI: Big Indian private companies may soon be allowed to manufacture automatic and semi-automatic weapons for defence, central paramilitary and state police forces. The home ministry recently proposed that companies, with FDI upto 26% or without it, be allowed to manufacture arms on a limited scale.

Such private companies will, however, not be allowed to sell the weapons in the local market through arms dealers. They will supply them to state agencies on tendering basis or may export them. At present, such weapons are only produced by public sector ordnance factories. Besides, the requirement of the forces are met through imports from various countries.

Though a number of private units in the cottage and small-scale sectors have licences to produce arms, they are not allowed to manufacture advanced, automatic and semi-automatic, weapons. Currently, there are 95 firms licensed by the home ministry for the manufacture of single barrel or double barrel guns and 25 firms manufacturing cartridges (either blank or live or both) upto the quota permitted in their licences.

The proposal, allowing private companies to produce advanced weapons, is part of the draft arms and ammunition manufacturing policy of the home ministry. Making the draft policy public this week, the ministry pointed out that the decision has been taken ‘‘considering the requirement for advanced weapons by the defence sector, central paramilitary forces, technological upgradation of the arms and ammunition industry’’.

‘‘The proposal has taken into account the Cabinet decisions of 2001-02 which allowed manufacture of arms and ammunition in the private sector with nil or upto 26% FDI. The final decision will be taken after taking comments from different ministries as well as security and intelligence agencies,’’ said an official.

According to the draft policy, manufacture of arms in the private sector may be allowed on a limited scale subject to the industrial licence to be issued by the department of industrial policy and promotion which got the required sanction from the Cabinet eight years ago.

The draft says: ‘‘Applications from units in the large scale sector which are capable of producing advanced weapons and investing more than Rs 50 crore may, with or without FDI upto 26%, be considered by the DIPP as the item (arms and ammunition) is under compulsory licensing’’.