Of the 40-46 explosives licences given, only around 15-17 per cent of the holders have gone ahead with the manufacturing process | Photo Credit: ANI

The Army has sought intervention of the Ministry of Defence (MoD) to overcome challenges hindering conversion of close to 40 idle explosive licences into manufacturing facilities to meet demands for ammunition indigenisation, adequately equipping armed forces in a long drawn war. 

Of the 40-46 explosives licences given, only around 15-17 per cent of the holders have gone ahead with the manufacturing process. The rest are struggling for want of deep pockets, a large pool of land with sufficient water availability, foreseeable high risks and policy bottlenecks, said multiple sources in the Army, PSU and the industry.

Sources in the Army said they have apprised the top brass in the MoD, including in the Department of Defence Production, of the challenges that require addressal for achieving true Aatmanirbharta in the explosives and ammunition sector. 

The Ministry, however, is pushing private companies in defence manufacturing to offer a level playing field in the explosives and munitions domain like it has done in aviation and missile production sectors.

Apart from the State-owned Munitions India Ltd, which enjoys a monopoly in the segment, established private players are: Adani Defence & Aerospace, Premier Explosives Ltd, Solar Industries India Ltd, SMPP Ammunition Private Ltd, HBL Engineering Ltd and Hughes Precision Manufacturing Private Ltd.  

There have been Requests For Proposals (RFPs) in recent years which could not complete the procurement cycle due to the limitations which are beyond the realm of the domestic explosives and ammunition ecosystem.

The Army has achieved 91 per cent self-sufficiency to significantly reduce dependence on imports, indigenising 159 of the 175 ammunition variants in its inventory, businessline had reported in December, last year.

The critical issue is that people take licence and later realise associated problems; that they need a large chunk of land at a place isolated from habitation and has enough water due to manufacturing requirements, a former CMD of an ammunition PSU stated. 

Besides that, the cost involved is immense since India lacks inhouse technological capability to set up a plant and, in absence of that, sourcing from abroad would mean no less an investment of at least ₹200 crore to ₹400 crore, he said. On top of that, it takes a long time to get complete, he added. 

“It’s not economical since the returns on the cost will not match if the industry fails to get sustained long term business visibility”, said a senior officer of a private ammunition manufacturing company. 

Since the 2022 Russia-Ukraine war, there has been a global surge in the demand of munitions, especially artillery shells to sustain non-contact warfare but what if normalcy returns, the business will also take a hit, the officer said, expressing the dilemma of the industry.

Another senior industry functionary flagged policy constraints holding back people from moving ahead. “The binding factor of everything being made indigenously within two years is a little exigent for which we require the support of the MoD, primarily because the cost of establishing the plants are too enormous while the requirements are not as much,” he stated. We would need financial assistance in establishing a new plant, he noted.

A procurement procedure clause of 60 per cent indigenous content too needs to be revisited because many items are still not available in India and have to be imported, he explained.

Sharing an option to overcome these challenges, the industry functionary stated that the government may establish a plant which manufactures only primers and on the similar lines a plant which produces only single based and double based propellants that the armed forces need. 

In this manner all Indian companies will be then dependent on them and the need to import these items from foreign vendors would be eradicated, he observed. 

Also, in quite a few cases foreign original equipment manufacturers (OEMs) don’t transfer technology due to fear of losing their supremacy and large business opportunities from the Indian armed forces.

The market for military ammunition and high-grade explosives in India is undergoing a massive shift from import dependency to self-reliance. Border escalations, especially post Ops Sindoor, modern weapon platforms, and the “Make in India” push, have jacked up the overall domestic market for military ammunition valued at over ₹7,000 crore.

Published on June 25, 2026