Ammunition manufacturing: MoD inks Rs 5,336 cr contract with BEL

The Ministry of Defence (MoD) has signed a landmark contract with Bharat Electronics Limited (BEL) in Pune worth Rs 5,336.25 crore for the procurement of electronic fuzes for the Indian Army. The contract, signed on Friday, will span over the next 10 years and comes under the "Manufacture of Ammunition for Indian Army by Indian Industry" initiative by the central government.

The contract aims to build up the Indian Army's ammunition stocks. Following the "Aatmanirbhar Bharat" vision, the deal will aim to minimise imports, achieve self-sufficiency in ammunition manufacturing, obtain critical technologies and secure stock affected by supply chain disruption.

BEL will be manufacturing electronic fuzes at its Pune and, eventually, Nagpur plants. The contract is slated to generate employment for 150,000 man-days. It will also encourage participation from Indian industries in the ammunition manufacturing segment. Consequently, this should help broaden the ammunition manufacturing ecosystem in the country.

Electronic fuzes are a crucial component of medium to heavy calibre artillery guns. These are integral to providing artillery firepower for military operations. The fuzes will be procured for usage in artillery guns, which are capable of lethal engagements in various kinds of terrain, including high-altitude areas along the Northern Borders.

This news comes days after the defence ministry approved a Rs 2,800 crore proposal for buying around 6,400 rockets for Pinaka multi-barrel rocket launcher systems. Together, these projects will add a significant boost to the Indian Army in the coming decade.

BEL has already won orders worth Rs 18,298 crore in the financial year 2023-24, reaching a new all-time high for the company. This includes an annual maintenance contract (AMC) of radars worth Rs 580 crore from the Indian Army with additional orders worth Rs 3,335 crore related to AMC, among other orders. As earlier reported by Business Standard, the government-owned company had already been anticipating additional contracts worth Rs 6,000 crore before the end of the year, Rs 5,336.25 crore of which has been fulfilled with this contract.