AK-203: A Boost for the Army and Make in India
(Source: Institute for Defence Studies and Analyses; issued March 11, 2019)
Nearly 10 years after the Army expressed a strong desire to replace the INSAS with a modern assault rifle, the government has zeroed in on AK-203 as the basic weapon for the vast majority of the Indian defence and security forces.

The new weapon, the most advanced version of the famous AK series of rifles, will be manufactured in the country by the Indo-Russian Rifles Pvt. Ltd, a Joint Venture (JV) between the Ordnance Factory Board (OFB) and Russian partners.

The AK-203 will not only boost the Army’s fire power and morale but will also further the Make in India initiative in defence manufacturing through the 100 per cent indigenisation of the rifle in a few years. The Ordnance Factory Board’s Project Korwa in Amethi, Uttar Pradesh, which will manufacture the rifles as the main JV partner, is the major beneficiary as its volume of business is set to increase manifold with a firm order of at least 750,000 rifles.

The Army’s Long Search for an Assault Rifle

Ever since the 5.56x45mm INSAS was inducted in 1994, the Army has been dissatisfied with this rifle designed by the Defence Research and Development Organisation (DRDO) and manufactured by the OFB. The rifle’s limitations in terms of lethality and reliability, as well as weight and lack of integrated sighting system, led the Army to look for an alternative even though a number of improvements were made over the years.

In November 2009, the Defence Acquisition Council (DAC), the highest decision-making body of the Ministry of Defence (MoD), gave in-principle approval for procurement of 1,87,825 assault rifles (including 16,056 for the Navy) under the ‘Buy and Make’ category with a provision of license production by the OFB. Post the DAC approval, the Army issued a Request for Proposal (RFP) in November 2011 for the procurement of a dual calibre (capable of firing both 5.56x45mm and 7.62x39mm ammunition) assault rifle.

The RFP did not, however, fructify as no vendor could meet the stringent technical specifications – called the General Staff Qualitative Requirement (GSQRs) in procurement parlance. Consequently, the RFP was retracted in June 2015.

Following the retraction of the RFP, the Army along with the OFB, DRDO and Directorate General Quality Assurance (DGQA) attempted to develop a new 5.56x45mm assault rifle. Although the new rifle, named INSAS 1C and produced by the Rifle Factory Ishapore (RFI), could meet the required technical and operational parameters including reliability test with firing of 2400 rounds, it did not progress further.

In August 2016, the Army changed the specification of the calibre to 7.62x51mm based on its revised operational philosophy that gave prominence to ‘Shoot to Kill’ over ‘incapacitation’, which was the major design consideration behind the INSAS 1C development.

With the revised operational philosophy in place, the Defence Minister, in a meeting held in September 2016, directed the OFB to develop a 7.62x51mm assault rifle under the guidance of the Project Monitoring Team (PMT) set up under the chairmanship of Director General Infantry (DG-INF) with members drawn from the DRDO and DGQA. The first prototypes, produced by the RFI, were ready by May 2017. But the initial trials were apparently not up to the Army’s expectations.

With the PMT-led development of a rifle not satisfying the army, and with the latter in urgent need of a modern long-range rifle for frontline troops deployed on the borders, the DAC on January 16, 2018 decided to procure 72,400 rifles along with 93,895 carbines on a fast track basis.

The following month, on February 13, 2018, the DAC gave another approval for 740,000 assault rifles for the three Services under the ‘Buy and Make (Indian)’ procurement category, with the provision that both the OFB and the private sector would licence-manufacture a portion each.

The tender for the procurement of 72,400 rifles has fructified, with the American Firm, Sig Sauer, signing the contract valued at nearly Rs 700 crore with the MoD in February 2019.

The procurement rifles took a new and decisive turn when India and Russia reached an agreement to set up the Kalashnikov production centre in India during President Vladimir Putin’s visit in October 2018. An Inter-Governmental Agreement (IGA) soon followed on February 18, 2019 to set up a joint venture to produce at least 750,000 7.62x39 mm AK-203 rifles in India.

As per the IGA, the JV, which was registered on February 25, 2019, will have a 50.5 per cent equity stake by the OFB and the balance by the Russian partners. The equity structure emulates that of another India-Russia JV, BrahMos Aerospace, and is designed to allow the firm to operate as a private company rather than as a public sector enterprise.

India’s choice of AK-203 was influenced by the rifle’s modern design and potency. It was selected over other AK series of rifles – AK-103, AK-103 (Modernised) and AK-15 – which were all evaluated by a team of Army officials who, along with OFB officials, visited the Kalashnikov manufacturing centre in Russia in early December 2018. The Army found that the AK-203 has better accuracy, more picatinny rails (required for mounting various types of day/night sights and grenade launcher on the rifle), reduced flash and recoil, better ergonomics and greater ease of operation in combat.

The AK-203 was developed in 2016 and supplied to the Russian armed forces in 2018. India will be the first country to which Russia would be transferring the design/manufacturing of this rifle.

The signing of the IGA and the formation of the JV have finally brought to an end a decade-long saga involving an arduous process for inducting a modern rifle for the Indian armed forces.

Boost to Make in India

While the Army will finally get its long-waited weapon, the AK-203 is also an attractive proposition for the Make in India initiative, and for the OFB in particular. The objective of higher indigenisation, as enshrined in the Make in India programme, is set to be achieved in the course of producing the rifle in India. As per the IGA, the indigenous content (IC) is to be progressively increased in each phase of production. All rifles to be produced beyond the first 120,000 will have 100 per cent indigenous content (see Table 1).

More significantly, 100 per cent indigenisation is to be achieved in 32 months from the contract date, and all the future technological upgrades to the rifles, as and when required, will be done by the JV in India. The OFB, which is facing increasing competition from the private sector, could not have asked for more as it is assured of nearly Rs 5,000 crores of order through the production of the AK-203. Moreover, given that the JV is a first involving an ordnance factory, it will open up opportunities for the OFB to explore other international partnerships to stay ahead of its competitors.

The major beneficiary of the AK-203 deal is clearly the Ordnance Factory Korwa which was set up in 2007 with a sanctioned investment of Rs 408 crore to manufacture Close Quarter Battle (CQB) Carbine under Transfer of Technology (ToT). Earlier, because of the non-fructification of ToT due to a variety of reasons, the factory, which has over 200 employees on its payroll, has been operating well below capacity, with output limited to the manufacture of low-value Bore Action Guns for the Ministry of Home Affair and State Police Forces, and various parts and components for sister factories.

With a voluminous order of Rs 5000 crore and an annual targeted production of 75,000 rifles, the company will be able to fully utilise its available production capacity for at least a decade. With its volume of business set to increase by nearly 30 times on an average in the next 10 years, it may well seek an expansion of its present capacity. The order will also allow the factory to play the role of an anchor investor for creating a local supply-chain for parts and components, which will create employment opportunities and boost economic growth in and around Korwa.

More significantly, with an order to manufacture the most contemporary rifle in the world, the factory stands a good chance of becoming the centre for small arms manufacturing in the country besides breaking into the lucrative export market.

Conclusion

India’s current and future security environment necessitate the continued deployment of security forces, especially the Army, in a highly lethal environment involving both conventional and sub-conventional war. With the AK-203, the Army’s long search for a modern assault rifle to deal with multiple challenges has finally come to a successful end. The rifle’s proven lethality, accuracy, reliability, and advanced features would give every soldier in possession of the weapon the necessary confidence and morale to take on a wide spectrum of challenges effectively and efficiency.

The fact that the rifle would be produced in India with 100 per cent indigenous content in less than three years makes it a win-win deal for the Army and the Make in India initiative, with Ordnance Factory Korwa emerging as the biggest winner.

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