Russia has been strengthening efforts to ink a deal for localisation of Kalashnikov rifles’ manufacturing in India, on the lines of “Make in India” policy in the defence sector. More than five rounds of negotiation for the same were held since the last meeting of countries’ lenders Narendra Modi and Vladimir Putin in October.

Last week, a delegation from Russia landed in New Delhi for another round of talks with Ministry of Defence and State-owned Ordinance factory board (OFB), to discuss the draft of an intergovernmental agreement for a joint venture between Russia’s Kalashnikov Concern and OFB.

The deal will be for up to 7,50,000 units of AK-103 assault rifles, the third generation of AK-47, sources close to the talks told BusinessLine .

The rest of the details, including costs, localisation timeline and other issues are yet to be settled.

Similar agreements

According to the plan, the joint venture facility will be manufacturing rifles for the Indian Army as well as police forces, and it could as well facilitate export orders, the sources said. The Indian government is keen on 100 per cent local content for manufacturing of the rifles. They added that after the intergovernmental agreement is signed, the parties will sign a detailed contract.

This way, the structure of the deal hence is similar to a $1-billion deal for Ka-226T helicopters, which was inked in 2016. The deal has not yet materialised — even though the joint venture between Hindustan Aeronautics Ltd and Russian Helicopters has been set up last year, the contract for 200 helicopters is yet to be signed.

A source in the Russian government, however, noted that for both Russia and India, the “Kalashnikov” deal is the top priority.

The latest deal inked between the two countries is the $5.5-billion contract for five S-400 Triumf missile systems, signed in October last year during the India-Russia annual summit. The deal for AK rifles, too, was on the potential list, among other defence deals. However, sources point out, with the US actively pushing sanctions against Russia, more deals at the October summit would have been a difficult task for India.

Interestingly, according to sources, at the initial stage of talks for Kalashnikov deal, the Adani Group was proposed by Russia as their potential partner in India.

“This was proposed by the Russian side, following consultations with India, and considering the Indian government’s move to involve country’s private sector in the defence manufacturing field. However, the name of Adani Group was removed right after the first consultations, and now the only partner proposed for the join venture is OFB,” one of the sources said.

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