India clears deal to locally produce Russian AK-203 rifles

India's Defence Acquisition Council (DAC), headed by Defence Minister Rajnath Singh, has approved the procurement of 671,000 locally produced Russian Kalashnikov AK-203 assault rifles for the Indian armed forces, it has been confirmed to Janes .

Indian Army sources said the DAC approval will enable a contract, valued at INR51.24 billion (USD690 million), to be signed with Russia during President Vladimir Putin's visit to India in early December.

The AK-203 deal was provisionally agreed through an Indo-Russian government agreement signed in 2019. However, the deal had been stalled because of India's refusal to pay royalty payments for each locally manufactured 7.62 mm rifle. Such payments would have made the deal more expensive than direct imports from Russia.

Sources told Janes that the DAC has now resolved these issues. Instead of royalties, the DAC has approved an undisclosed amount that India will pay for the transfer of technologies that will facilitate licence-production at the state-owned Indo-Russian Private Limited (IRPL) joint venture, which is located in Korwa, in northern India.

The pending contract also includes the direct import from Russia of 20,000 AK-203 rifles with collapsible stocks for USD1,100 each.

These rifles will supplement 70,000 AK-203s that India agreed to import from Russia in August for INR3.24 billion. Payment for these rifles is expected to start after the licence-production contract is signed, with deliveries commencing after three months.

IRPL was previously operated by the state-owned Ordnance Factory Board (OFB), before it was dissolved in September. IRPL is now run by two new state-owned firms, Advanced Weapons and Equipment India Limited and Munitions India Limited, both of which emerged out of OFB's dissolution.