Two major weapons manufacturers exit Indian army’s small arms tender

Posted: May 12, 2018 in Semco Group

The Indian army quest to equip its soldiers with modern rifle and carbines suffered a setback this week when two major weapons manufacturers, US gunmaker Colt and Italy’s Beretta, pulled out of the contest. Both Colt and Beretta were offering weapons for the 7.62×51 mm battle rifle and the 5.56×45 mm carbine requirements. The two companies were not among the dozen-odd firms which had responded to the Indian armys Request for Proposals (RFP) by May 7.

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While the exact reasons for the pullout are not known, at least one of the manufacturers is believed to have written a letter to the army citing unrealistic timeframes and stiff financial clauses.

The army plans to import 72,000 assault rifles and 94,000 carbines on a fast track basis for over Rs 3,500 crore. It had issued RFPs on 17 global arms manufacturers in February this year citing urgent operational requirements for its troops. These small arms are meant to replace the armys stock of INSAS rifles and vintage Sterling 9 mm carbines. A fast track procedure bypasses the lengthy trial process associated with regular purchases. The army hopes to complete the acquistion of all the weapons in 12 months, a time frame stipulated by the Defence Procurement Procedure (DPP) 2016.

The bids from the other firms in the assault rifle and carbien tenders are believed to have been opened on May 8 and the Technical Evaluation Committee (TEC) that convened on May 10 and is to submit its report in 10 days.

Global arms makers have been largely lukewarm to the armys small arms procurement. Two of the largest gunmakersFN Herstal of Belgium and Germanys Heckler & Koch did not even participate in the small arms tender.

Some clauses in the contract which have made it unappealing to foreign vendors include parking nearly 15 per cent of the value of the contract as a performance bank guarantee, the removal of the force majeur clause which allows a manufacturer to suspend a contract due to unforseen consequences like war or a natural disaster.

The foreign vendors too have to secure export licenses from their own governments in the limited time available. Other clauses which make the contract unappealing are clauses for the winning firm to deliver the first batch of 25,000 weapons (assault rifle and carbines) in the first nine months and the remainder within three months. This deadline can be extended only by another three months after which financial penalties kick in.

It doesnt make commercial sense for us to participate in the tender, said the representative of a leading small arms firm said at the biennial Defexpo India 2018 inaugurated in Chennai on April 12. The army is also looking to buy 5,719 sniper rifles and 17,000 light machine guns. Israel Weapons Industries (IWI) is the only small arms firm in the reckoning for all three infantry weapon types battle rifles, carbines and light machine guns.

The new RFPs for rifles and carbines is the armys third attempt to buy new small arms since it decided to replace its indigenous but glitch-prone INSAS rifles in 2007. The process has been delayed by the armys own changing requirements. Between 2011 and 2017 the army issued three requirements for small arms, or roughly one every two years.

The first tender in 2011, for a dual-caliber rifle chambered for two types of ammunition (7.62×39 mm and 5.56x 45 mm) was withdrawn in 2015. A second attempt, in 2015, to buy modified INSAS 1C rifles was scrapped after the army opted for a battle rifle chambered for the heavier 7.62×51 mm round.

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