Manufacturing Of Ammunition For The Indian Army By Indian Industry (2017): Advancing Defence Self Reliance

Policy Update
Tanisha

Background

For most of independent India’s history, ammunition manufacturing for the Army sat almost entirely with the Ordnance Factory Board. Private companies could make individual components, shells, fuzes, propellant, but the explosive filling process itself, the step that turns components into finished ammunition, was never licensed to a private player. That monopoly came under direct scrutiny in July 2017, when a Comptroller and Auditor General report tabled in Parliament found that the Army’s war reserve could not sustain even 10 days of intense fighting for roughly 40 percent of its ammunition types (Scroll.in, 2017).

The government’s response came five months later. On 20 December 2017, the Ministry of Defence approved the manufacture of 8 categories of ammunition for the Army by Indian industry, the first time private companies were permitted to carry out the complete manufacturing process, filling included, for ammunition meant for frontline use (Ministry of Defence [MoD], 2017).

Functioning

Eligibility was deliberately narrow and deliberately Indian: companies registered under the Companies Act, 2013, with foreign direct investment capped at 49 percent and majority ownership and control resting with resident Indian citizens; consortiums were allowed, but only among Indian companies (MoD, 2017). Selection ran through an Open Tender Enquiry on a two-bid system, and any eligible company could bid for more than one ammunition category. The defining feature of the model was its duration: contracts were structured to run 10 years, long enough, the Ministry argued, for private firms to justify the capital investment that explosive-filling infrastructure requires (MoD, 2017).

Private industry responded with real capital. The Kalyani Group, through Bharat Forge and its joint venture with Israel’s Elbit Systems, the Chowgule Group, Reliance Defence, Godrej & Boyce, Solar Industries and Premier Explosives were among the companies that moved into ammunition manufacturing under the new framework in the years that followed.

Table 1. Key milestones, ammunition manufacturing by Indian industry, 2017-2025. 

Performance

The scheme’s early years were slower than its design implied. Industry assessments reported that of 12 Requests for Proposals issued after the 2017 approval, procedures were amended repeatedly, only 4 reached trial stage, and no firm order had fructified for roughly five years. The turn came in December 2023, when Bharat Electronics Limited’s Pune unit signed a 10-year fuze contract under the scheme, followed in February 2024 by Adani Defence & Aerospace’s opening of a 500-acre ammunition and missiles complex in Kanpur, built with private capital specifically to supply under this framework.

Figure 1. Growth in ammunition variants offered to Indian industry under the scheme, 2017 to 2025. Source: Ministry of Defence (2017, 2025).

By the Ministry’s own account at the end of 2025, the scheme has grown considerably past its original 8 categories: 32 ammunition variants are now offered to Indian industry, organised into 12 procurement cases worth ₹15,899 crore, of which 4 cases worth ₹5,696 crore have already been placed with DPSUs and private players (MoD, 2025). That sits inside a wider ammunition indigenisation picture in which 159 of the Army’s 175 scaled variants, close to 91 percent, are now indigenised overall, across DPSU, DRDO and private-industry routes combined (MoD, 2025).

Impact

The clearest impact of the 2017 decision is structural rather than numerical: it broke a monopoly that had stood since independence. Whatever the pace of individual contracts, the explosive-filling step is no longer something only the Ordnance Factory Board’s successor companies are licensed to do, and the Adani Kanpur complex alone claims capacity to cover roughly a quarter of India’s small-calibre ammunition requirement. That is a different kind of industrial base than existed in 2017, when the entire private-sector contribution to ammunition was limited to components.

Set against the CAG’s 2017 finding, a 10-day war reserve for 40 percent of ammunition types, the current 91 percent overall indigenisation figure and the growth from 8 to 32 variants under this specific scheme both point toward a material change in how exposed the Army’s ammunition supply now is to a single source, domestic or foreign. The gap between the policy’s 2017 intent and its first fructified long-term order in December 2023, six years later, is itself part of that record.

Emerging Issues

• The scheme’s own history shows how long tender-to-contract can take under this model. Six years passed between the original 2017 approval and the first long-term order actually being signed; nothing in the public record explains whether the procedural amendments that slowed the first 12 RFPs have been fixed for the current 12 procurement cases, or whether a similar lag should be expected.
• Capacity is concentrated in a small number of large private players. Adani’s Kanpur complex alone is described as covering roughly a quarter of national small-calibre requirement; a scheme designed to end a single state-owned monopoly could, without deliberate diversification, end up resting on a small number of large private ones instead.
• The 91 percent overall ammunition indigenisation figure blends DPSU, DRDO and private-industry contributions, and the public reporting does not separate out how much of that figure specifically traces to this 2017 private-industry scheme as opposed to the broader indigenisation drive. That makes it difficult to judge this scheme’s contribution on its own terms rather than as part of an aggregate headline number.

Way Forward

• Report this scheme’s own contribution to ammunition indigenisation separately from the aggregate DPSU-DRDO-private figure, so that the specific policy introduced in 2017 can be evaluated on data that actually traces back to it.
• Publish a standard tender-to-contract timeline target for the 12 current procurement cases, given how far the original 12 RFPs departed from any implicit timeline between 2017 and 2023.
• Set a minimum-vendor-count rule per ammunition category under the scheme, similar to the single-source versus multi-source tracking already used elsewhere in ammunition indigenisation reporting, to avoid recreating a concentration risk with private firms that the 2017 decision was meant to move away from with OFB.
• Use the Bharat Electronics Pune and Adani Kanpur cases as documented models, a signed long-term contract and a built private facility, when assessing why the remaining 8 of the 12 current procurement cases have not yet been placed.

References

1. Ministry of Defence. (2017, December 20). Manufacturing of ammunition for the Indian Army by Indian industry [Press release]. Press Information Bureau, Government of India. https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=174629 
2. Ministry of Defence. (2025, December 31). Year end review 2025 [Press release]. Press Information Bureau, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2210154 
3. Scroll.in. (2017, July 22). Indian Army lacks ammunition and cannot fight a war longer than 10 days, says CAG report. https://scroll.in/latest/844692/indian-army-lacks-ammunition-and-cannot-fight-a-war-longer-than-10-days-says-cag-report 
4. The Week. (2024, February 26). Adani Group opens South Asia’s largest ammunition, missiles complex in UP’s Kanpur. https://www.theweek.in/news/biz-tech/2024/02/26/adani-group-opens-south-asias-largest-ammunition-missiles-complex-in-ups-kanpur.html 

About the Contributor

Tanisha is a Political Science graduate (BA Hons, University of Delhi; MA, IGNOU), currently pursuing a Diploma in Conflict Transformation and Peacebuilding, with research interests spanning international relations, environmental governance, and gender studies. She is keen to build a career in policy research.

Acknowledgements

The author sincerely expresses gratitude to the reviewers Nivedya Murali and Ravirala Lahari for their valuable comments, constructive suggestions, and continuous guidance throughout the preparation of this article. Their insightful feedback significantly enhanced the clarity, organisation, and analytical quality of the manuscript. The author also acknowledges the support and encouragement received during the research and writing process, which contributed to the successful completion of this work.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.

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