NEW DELHI — Firearms manufacturer Israel Weapon Industries and India-based private sector firm Punj Lloyd have begun to jointly produce a variety of small arms from the Israeli company's product line, of which some are for use by Indian armed forces.

The new venture, named Punj Lloyd Raksha Systems, or PLR, was formally opened last week, and its expected to tap a solid chunk of India's small arms market estimated at more than $5 billion.


PLR is the first private manufacturer of small arms in India that produces equipment for both use by the Indian defense forces and for export. The joint venture has an equity holding in the ratio of 51:49 percent equity, with the majority stake going to Punj Lloyd.

"The small arms plant will be manufacturing the [Tavor] carbine, [X95] assault rifle, [Galil] sniper rifle and [Negev] light machine gun ... and [PLR] became fully operational on 4 May 2017 itself," said Ashok Wadhawan, the president of manufacturing at Punj Lloyd.

"We are targeting the supply of carbine, assault rifle, sniper rifle and light machine gun for armed forces, paramilitary forces and state police. We are also going to be targeting the requirement of sights for the weapon systems, which is vital for the accuracy of the weapons," he added.

One of the upcoming tenders is for the procurement of 7.62x51mm assault rifles. The Indian Army last year floated a global request for information to purchase a assault rifles with that specification in order to replace its existing 5.56mm INSAS (Indian small arms system) rifles.

The new venture could tap "a major chunk of the Indian defense market because of its Make in India character," according to Arkur Gupta, a defense analyst with Ernst & Young India. "The multi-caliber assault rifle and the carbine gun have both been retracted. So we should expect a fresh request for proposal."

India has an immediate requirement for 66,000 assault rifles, with a total requirement is 250,000. Expected in the next two months in a tender valued at $1 billion for the assault rifles, said an Indian Army official. The earlier 2011 global tender for 66,000 7.62mm assault rifles was canceled last year, the Army official noted.

Another major tender on deck is the purchase of sniper rifles for which an expression of interest was floated last year.

The Indian Army wants sniper rifles with higher caliber, 8.6mm bullets compared to the 7.62mm ammunition currently in use. In addition, the new sniper rifles are required to have 50 percent more range than the current 1,200-meter-range sniper rifles.

The major users of small arms are the three defense services, paramilitary forces and the state law enforcement agencies. It is estimated that the current inventory is estimated to contain around 3 million small arms.

In the next five years, the inventory is expected to rise to 8 million rifles. Until now, the state-owned Ordnance Factory Board continues to be the main source for small arms, including imports. However, OFB has been lagging behind in its production program for ammunition and weapons.

The Army is currently using the INSAS 5.56mm rifle, designed by the Defence Research and Development Organization and built by OFB. It was introduced into service in the mid-1990s and is overdue for replacement. Most of the other small arms and ammunition held by the defense services are of foreign design and manufactured under license in India, but there are efforts to indigenously design and manufacture equipment.

The joint venture between Israel and India comes at a time when the Indian Army has chosen to use to the 7.62x51mm caliber rather than the 5.56x39 caliber "with the aim of killing and not injuring as part of a new philosophy," an Army official offered.