Ordnance Factories Removed From List Of World’s 100 Top Arms manufacturers

Decision to break OFBs into multiple PSU’s proved to be a self-defeating step, says C. Srikumar, General Secretary, AIDEF

Every year, the Sweden based International Institute, Stockholm International Peace Research Institute which is doing research activities on conflict, armaments, arms control and disarmament used to publish the list of 100 top Defence Equipment manufacturing Industries in the world.

This institute in its latest report on the top 100 Arms producing and Military services company has removed the name of Indian Ordnance Factories which used to be there in the list every year. This year from India only 2 DPSU’s are there in the rank list. HAL is at 42nd position and BEL is at 69th position.

According to the report the 2 companies saw an increase of 1.9% in their total Arms sales for the year 2021. This time one Taiwanese firm for the first time is listed in the top 100. It specializes in Missiles and Electronics etc., China has a total of 8 Military industries listed in the top 100. Russia has its 6 companies in top 100. The companies belonging to US are the over all leaders in the list with 51% of the total Arms sales.

It is a blow to the Indian Ordnance Factories which always remains in the list of 100 Defence manufacturers. Experts feel that this will have serious implications, since it will be difficult now for the Ordnance Factories to enter into the export market.

Is Corporatization of Ordnance Factories is the reason for its absence in the prestigious list of Arms manufacturers, C. Srikumar, General Secretary, AIDEF, told www.indianpsu.com “we anticipated that this will happen if the Ordnance Factories are corporatized and splintered into 7 pieces. The Government refused to listen to us when we placed before the Government the ill-effects of Corporatizing the Ordnance Factories. On the 26 th of November 2022 the AIDEF, BPMS and CDRA submitted a joint representation to the Defence Minister in which with examples and instances we have proved that Corporatization of Ordnance Factories is a failure. Till date neither we have received any response from the Government, nor we have been called for a discussion by the Ministry of Defence. If one look at the Stockholm International Peace Research Institute’s report of 2018,
India has just 3 companies, Ordnance Factories ranking at 38, HAL at 44 and BEL at 66 in top 100 companies. The Government of India should have strengthened the Ordnance Factories so that it must have become the world beater. Instead of doing that the Government has broken up OFB into multiple PSU’s which is nothing but a self- defeating step to disempower India and it is a retrograde step. It will be now very difficult for the Ordnance Factories to reenter into the top 100 ranking Defence manufacturing units of the world. The only way out is to withdraw Corporatization of Ordnance Factories and to restore back the status of Ordnance Factories as Ordnance Factory Board as a Departmental entity.

He added that we have given so many suggestions in writing to the Government to strengthen and expand the Ordnance Factories in the Government setup itself so that Ordnance Factories become a world leader in the Defence manufacturing. However, all our suggestions were rejected by the then Bureaucrats of the Ministry of Defence and none of them are now available in the Ministry of Defence to reply that why Ordnance Factories have been removed from the list of 100 Defence manufacturing industries.

Srikumar further added that the HAL and BEL were able to retain their position in the ranklist only because of the reason that the Armed Forces have placed major orders to these two companies in the recent past. Unfortunately, the Government has given free hand to the Armed Forces to purchase equipments from the market and not directly from the Ordnance Factories. How can the country allow a major Defence industry to become irrelevant in the domestic and international scenario. The fundamental requirement for the survival of the Ordnance Factories is that the Government should direct the Armed forces to place indent on its requirement directly from the Ordnance Factories so that the installed capacity of plant and machineries and the highly competitive manpower is fully utilized.

He said India’s Defence Budget for 2022–23 is Rs.5,25,166 Crore. Of which if the Armed forces place an indent of Rs.17,000 Crore to Rs.20,000 Crore on various requirements of the Armed Forces the Armed forces also
will be benefited by getting the supply of Defence equipments from the Ordnance Factories and the Ordnance Factories also will be benefited. It will be a win win situation. This will be hardly 3 to 3.5 percentage of the total Defence Budget. This much Government can spare for retaining the Indian Ordnance Factories as a War Reserve which is essential for a country like India.

Srikumar says I fail to understand why the Government is not going through the history. In all the wars India fought post Independence, the private companies always failed in supplying Defence equipments to the Armed Forces and it was only the Indian Ordnance Factories which came to the rescue of our Country. Records are available about what happened in Indo-Pakistan war, Bangladesh Liberation war, Kargil Crisis, etc., even during the COVID-19 lock down period it was only the Ordnance Factories which produced Medical Mask, Coveralls, Sanitizers, Medical Tents etc,. even though these products were never manufactured in the Ordnance Factories.
At least, the recent report of the Stockholm International Peace Research Institute should be an eye opener for the Government. If the Government continues to ignore the Ordnance Factories ultimately the Nation has to pay a big cost in future, concluded C. Srikumar.

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