In mid-2021 India announced the dissolution of the state-owned OFB (Ordnance Factories Board) and instantly boosted morale in the military. Eliminating the OFB is a key part of an effort to develop more local firms that can develop and manufacture quality weapons for the Indian military and export. India is also sharply reducing its decades-long dependence on Russian weapons, usually arranged by the OFB and resulting in less reliable and effective weapons being imported. The latest example of this was the April 2021 partnership deal OFB arranged with the Russian JSC Kalashnikov Concern and the Russian government to jointly build a factory in India to produce at least 700,000 Russian designed AK-203 7.62/39mm rifles under license. The new IRRPL (Indo-Russia Rifles Private) firm would be 50.5 percent owned by the OFB, 42 percent by Kalashnikov and the rest by the Russian government. The first 100,000 AK-203s were imported from Russia and the new IRRPL plant will assemble Indian-made and Russian-made components until Indian suppliers for all the components can be found. IRRPL currently has orders from the Indian Army and other Indian security agencies to keep the factory operational into the early 2030s. If IRRPL can maintain quality standards, their AK-203 will find more customers inside India and elsewhere.
The AK-203, along with a smaller number of imported German SIG716 sniper rifles, will replace the locally designed and built INSAS (Indian Small Arms System) rifles, another OFB project that proved to be a disaster when actually used in combat. There are also still a lot of elderly AK-47s in user by Indian police and other security agencies that need to be replaced by something at least as good as the AK-47 and preferably similar. The INSAS was also similar to the AK-47 but less reliable. The AK-203 is similar to the AK-47 but with additional capabilities users have already reported as satisfactory.
The OFB delays in working out the AK-203 deal forced Indian military leaders to improvise. In 2019 India ordered 72,400 German designed, American built SIG716 7.62/61mm rifles for snipers, or “designated marksmen” in infantry units. These have been delivered and the Indian Army is trying to get money to buy more.
The demise of the OFB was not a surprise because in 2016 India was forced to eliminate the monopoly the OFB long had for producing ammunition. This change has been long sought. Decades earlier local civilian firms demonstrated that the ammo can be made cheaper, of higher quality and faster if state owned manufacturing is not involved.
The OFB has been around since 1775 when the British East India Company, which was key in industrializing India, sought to create a local source of gunpowder and other munitions while also controlling who had access to it. When British India became independent in 1947 it inherited the OFB, along with a nationwide bureaucracy, a common language (English) for government and commerce and a preference for socialism in the form of state-controlled monopolies. Britain got rid of its state-owned firms in the 1980s and India, for much the same reasons, followed suit in the 1990s. There was one major exception with India and that was the long-established use of government jobs as a form of patronage to help politicians stay in office. This exists in many other democracies but India had a particularly nasty addiction to this sort of thing. For example, Indian primary education is still a shambles because teaching jobs often go to incompetent or non-existent people and state-owned defense industries were perpetually overstaffed and inefficient with military veterans generally excluded as potential troublemakers.
Maintaining a credible military in the face of threats from China and, to a lesser extent, nuclear-armed Pakistan meant the largest, in terms of population, nation on the planet would never be self-sufficient in ammunition manufacturing unless it allowed privately owned Indian firms to participate. The elimination of the OFB monopoly meant politicians lost control over more than 100,000 jobs. But the other 99.99 percent of Indians will benefit from a more effective national defense plus fewer jobs for the politically connected. The private ammo manufacturers can export, which state owned firms have been ineffective at. The private industry offers fewer but better quality jobs in terms of pay skills and opportunities. It has not gone unnoticed that India has fallen behind China in defense matters largely because China allows private firms to design, manufacture and sell military equipment to the Chinese military and a growing list of export customers.
Initial ammo needs were mostly for Russian designed items like unguided rockets, 125mm tank shells, 23mm and 30mm autocannon shells as well as a growing number of Western designs items like 40mm grenades and 155mm artillery shells. The government allows Indian firms to make deals with foreign manufacturers in order to obtain needed design and manufacturing technology. Indian firms have already been doing this since the 1990s for non-military items and that led to innovations and efficiency conspicuously absent in state owned firms.
The major failures of the OFB had to do with early efforts to develop and manufacture basic weapons locally. This began in the 1980s when there was growing clamor for India to design and build something as basic as the standard infantry rifle. At that time soldiers and paramilitary-police units were equipped with a mixture of old, but still quite effective British Lee-Enfield bolt-action 7.62mm rifles and newer Belgian FALs, sort of a semi-automatic Lee-Enfield, plus a growing number of Russian AK-47s. The rugged and reliable Russian assault rifle was most popular with its users and by far the cheapest to buy.
In the late 1980s India began developing a family of 5.56mm infantry weapons that included a rifle, light machine-gun and carbine. This was the INSAS and the OFB factories were unable to produce the quantities required and agreed to. Worse, the rifles proved fragile and unreliable. The design was poorly thought out and it is believed corruption played a part because the INSAS had more parts than it needed and cost over twice as much to produce as the AK-47.
In 1999 the INSAS rifles got their first real combat workout in the Kargil campaign against Pakistan. While not a complete failure, the nasty weather that characterized that battlezone high in the frigid mountains saw many failures as metal parts sometimes cracked from the extreme cold. Troops complained that they were at a disadvantage because their Pakistani foes could fire on full-automatic with their AK-47s while the INSAS rifles had only three bullet burst mode which, fortunately, sometimes failed and fired more than three bullets for each trigger pull. What was most irksome about this was that the INSAS rifles were the same weight, size and shape as the AK-47 but cost about $300 each, while AK-47s could be had for less than half that. The INSAS looked like the AK-47 because its design was based on the AK-47 and was a less effective and more expensive version. This was typical of OFB work.
The Indians persevered, tweaking the design and improving the manufacturing process. Because of that, after nearly two decades the INSAS weapons were gaining some acceptance. Compared to most 5.56mm rifles on the market, INSAS had a price advantage and India was looking for export customers. No one was really interested. Only three small nations showed interest, and that was more for political reasons than for military ones. The major export customer (Nepal) got them at a huge discount and quickly found Nepalese troops demanding a replacement rifle because the INSAS was fatally unreliable.
In the decade following the Kargil debacle, INSAS rifles also malfunctioned in several highly publicized incidents involving the leftist (Maoist) rebels increasingly active in eastern India. Responding to the continuing performance and reliability problems, some changes were made but most Indian users wanted a better rifle, not an improved failure like INSAS.
The Israeli an edge in combat experience helped them sell more weapons to India than anyone else but Russia and was a major reason their Tavor prevailed when it came to obtaining relatively small orders from Indian special operations forces. Politics intervened again and superior American and Israeli rifles were ignored in favor of the AK-203. Fortunately, the AK-203 was a decent design which, if manufactured competently in India, would satisfy Indian users still armed with the INSAS.
Failures with INSAS, artillery ammunition, a 155mm howitzer design, a new tank and many more embarrassments contributed to the demise of the OFB and the recognition that Indian firms could do a better job if allowed to. Without the OFB, a major obstacle to obtaining effective Indian-made weapons was achieved. This leaves only the state-owned DRDO (Defense Research and Development Organization) as the major obstacle to Indian self-sufficiency.