OFB-Kalashnikov JV for AK-203 fumbling over the price

OFB-Kalashnikov JV for AK-203 fumbling over the price

Tue, 08/20/2019 - 17:51
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By Rohit Srivastava

Six months after the inauguration of the much anticipated Indo-Russian joint venture (JV) to manufacture AK-203, the Indian soldiers will have to wait a bit more for a modern assault rifle. The JV failed to honour the Request for Proposal (RFP) sent out by Indian Army as it could not finalise the price of the gun, sources informed.

Originally the RFP was to be submitted by first week of August but now the deadline is likely to be shifted to the right. The series of meetings held since the launch of the JV during PM’s election campaign trail has failed to bring Russia and India to finalizing the price of the rifle.

Sources say some minor technical issues arose in the course of talks regarding the weapons’ precision assessment method that seems to have been resolved by now.  High-rank representatives of the Ministry of Defence, Ordnance Factory Board (OFB), Rosoboronexport and Kalashnikov Concern participated in rounds of talks.

The two sides are trying to keep the price around INR 75,000/rifle with the Russian share in the cost being around 20 per cent of the total cost while the OFB’s and JV’s combined exceeding 80 per cent, sources say.

Unlike other joint venture or license production, the AK-203 project is expected to have around 100 per cent indigenisation (by values of cost) from the first batches itself with only 20 000 rifles assembled from Russian technological kits.

Therefore, the cost component of the OFB will be high from the initial production batch of the gun. To come to the desired cost, the parties will have to reduce their input cost, and it is the proportion in which the reduction should be made which remains unfinalized. 

The next meeting of the JV is expected after the summit meeting between India and Russia. Prime Minister Narendra Modi is visiting Russia on September 4. Indian National Security Adviser Ajit Doval is visiting Russia on August 21.

The Indo-Russian Rifles Pvt Ltd, a partnership between Indian Ordnance Factory Board and Russian Kalashnikov Concern, will manufacture around 7.5 lakh rifles which will go on to replace the INSAS rifle, the current standard issue to Indian soldiers. These guns are also expected to equip other Indian forces.

The two sides have aimed at 100 per cent localization within the first two years of the project. Through the JV, two sides are looking at deeper cooperation, beyond just Transfer of Technology, including material based co-manufacturing, product-development and upgrade.


Coming from the home of the legendary AK-47, AK-203 is an improved version of the AK series, which fires 7.62x39 mm bullets and allows all modern add-ons, including a variety of sight systems, target designators and under-barrel grenades.

*Queries sent to OFB remained unanswered.