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The plan to manufacture 671427 of the AK 203 rifles at the factory has been under discussion for almost two years, with the contract stipulating 100% transfer of technology and possible exports in the future from the Indian plant.
“Negotiations are at an advanced stage. There were some last-minute hitches and hiccups and those have been ironed out now. I hope the final contract will be signed soon,” Army Chief Gen MM Naravane said in response to a ET question.
Sources said that as per current discussions, the rifles – to be made by a joint venture between Kalashnikov and the Ordnance Factory Board (OFB) – are expected to cost under Rs 70,000 a piece, significantly cheaper that US made rifles imported by the Army under an emergency order that cost the exchequer Rs 89,000 a piece.
Besides, India will get complete know how to manufacture modern assault rifles, given that the contract specifies that all of these need to be made completely in India from the first day. Sources said that there had been differences regarding the pricing of the deal, as OFB and Kalashnikov’s offer was deemed to be high but this is being sorted out.
A bulk of the cost for the rifles will go towards OFB which needs to absorb the technology. Sources said that the royalty per rifle to the Russian side will be just over Rs 6,000, against the rifle cost of Rs 70,000.
As reported by ET, the defence ministry had set up a pricing committee in June last year after difficulties in arriving at a final price for the project. The project has high priority on the bilateral agenda since an inter-governmental agreement was signed in January 2019.
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