OFB, which earlier controlled 41 ordnance factories, has been split into seven government-owned entities that will produce ammunition and explosives, vehicles, weapons and equipment, troop comfort items, opto-electronics gear, parachutes and ancillary products

Prime Minister Narendra Modi on Friday said one of the country’s key goals under the Atmanirbhar Bharat (self-reliant India) campaign was to emerge as one of the most powerful militaries and develop a modern defence industry in the country on its own steam.


The PM’s comments came while dedicating to the nation, on the occasion of Dussehra, seven new defence companies carved out of the now-dissolved Ordnance Factory Board (OFB).

The steps taken by the government during the last seven years were driven by this self-reliance mantra, he said, and the “transparency, trust and technology-driven approach” that the defence sector is witnessing at the moment was never seen before.

“For the first time after Independence, big reforms are taking place in the defence sector. Instead of policies that were a hindrance, a single-window system has been put in place, leading to an increase in the industry’s confidence. Indian companies are looking for opportunities in the defence sector, and now the private sector and the government are working together to achieve the national security mission,” Modi said.

Policy changes have resulted defence exports shooting up to more than 325% over the last five years, he added.

The PM’s comments came while dedicating to the nation, on the occasion of Dussehra, seven new defence companies carved out of the now-dissolved Ordnance Factory Board (OFB). He said the new entities would play a critical role in helping the country cut down military imports in line with the vision of Atmanirbhar Bharat.

In the 21st century, the growth and brand value of any country or company will be determined by its research and innovation, Modi said.

“From software to the space sector; India’s growth, its new identity, is the biggest example of this (research and innovation). I ask all companies and these seven new firms to make research and innovation a part of their work culture,” he said.

“You have to not only match the big companies in the world, but also take lead in future technologies. That’s why it’s important that you have a new thinking, give maximum opportunities to research-oriented youth and give them freedom to think. I also ask Indian start-ups to be a part of this new journey in the defence sector.”

He said that while cost competitiveness was India’s strength, high quality and reliability should be the country’s identity.

Last month, in a public function in Aligarh, Modi said that India was shedding its image of being a major importer of military hardware and carving out an identity for itself as a defence exporter.

“I am confident that these seven companies will form a strong base for the military strength of the country in the times to come,” he said on Friday in a video address, adding that the corporatisation of OFB had been hanging fire for nearly two decades.

The Union Cabinet, headed Modi, cleared the board’s corporatisation in June with an aim to boost efficiency and competitiveness.

OFB, which earlier controlled 41 ordnance factories, has been split into seven government-owned entities that will produce ammunition and explosives, vehicles, weapons and equipment, troop comfort items, opto-electronics gear, parachutes and ancillary products. The government issued an order last month dissolving OFB with effect from October 1.

The new companies are Advanced Weapons and Equipment India Limited, Troop Comforts Limited, India Optel Limited, Munitions India Limited, Armoured Vehicles Nigam Limited (AVANI), Gliders India Limited and Yantra India Limited.

The restructuring will provide more autonomy to the new companies to nurture innovation and expertise, Modi said.

Ordnance factories were engaged in the production of tanks, armoured personnel carriers, mine protected vehicles, bombs, rockets, artillery guns, anti-aircraft guns, parachutes, small arms, clothing and leather equipment for soldiers.

The government expects the seven new entities to increase their share in the domestic market through better capacity utilisation and also tap new export opportunities. During the last two decades, various high-level committees underlined the need to improve the functioning of OFB and making its factories vehicles of self-reliance for the country’s defence preparedness.

Modi said the ordnance factories had a glorious past, but their upgradation was ignored in the post-Independence period, leading to the country’s dependence on foreign suppliers. “These seven defence companies will play a major role in changing this situation,” he said.

Defence minister Rajnath Singh said the corporatisation of OFB will help overcome various shortcomings in the previous set-up and provide the new companies incentive to become competitive.

“The objective of this restructuring is to transform Ordnance Factories into productive and profitable assets, improve expertise in product range, increase competitiveness, improve quality, enhance cost-efficiency and ensure self-reliance in defence preparedness,” Singh said.

All the indents previously placed on OFB by various services, CAPFs and state police have been converted into deemed contracts. These deemed contracts numbering 66 have a cumulative value of more than ₹65,000 crore, as previously reported by HT.

The PM said the government has ensured that the interests of the employees are fully protected.

The All-India Defence Employees Federation (AIDEF) and three other workers’ associations, however, boycotted the official inauguration of the new companies. “We wore black badges and boycotted the function along with our families. We will decide the future course of our protests shortly,” said AIDEF general secretary C Srikumar.

In a major push to the self-reliance campaign in the defence sector, India has signed contracts and cleared projects worth almost ₹54,000 crore during the last month-and-a-half to boost the military’s capabilities with locally produced weapons and systems including transport planes, tanks, helicopters, airborne early warning systems and counter-drone weapons.

India has set aside ₹70,221 crore this year for domestic defence procurement, accounting for 63% of the military’s capital budget. Last year, the ministry spent over ₹51,000 crore, or 58% of the capital budget, on domestic purchases.

The country has also decided to ban the import of 209 weapons and systems to boost self-reliance. The ban, to be implemented progressively till 2025, covers artillery guns, missile destroyers, ship-borne cruise missiles, light combat aircraft, long-range land attack cruise missiles, basic trainer aircraft, and different types of helicopters.

“Self-reliance in the defence sector has to be seen against the backdrop of the threats India faces, and the need to build military capabilities. Atmanirbhar Bharat is also about cutting down critical imports and filling capability gaps indigenously,” said former Northern Army commander Lieutenant General BS Jaswal (Retd).