The Beginning

In 1787, the British set up India's first arms manufacturing facility at Ishapore, West Bengal

An Old Warhorse

The ordnance factories contributed majorly during the Indo-Pak wars of 1965 & 1971

Ordnance factory board has manufactured indigenous 120mm mortars, 155mm soltam among others

Make-in-India

The Question Of Exports

Quality, Delays & Corporatisation

The Arjun tank , one of India's finest has been made at ordnance factories

Over 200 years, words like reliability, expertise and monopoly can become tricky for any organisation. India’s ordnance factories are discovering the weight of history as government looks to corporatise and streamline them to function as sleek, profit-driven commercial enterprises.While historically, the factories have served as the backbone of the armed forces and thrown up successes crucial to winning wars, policy makers now think it is time that expertise is put to the test in the open market.The Centre is considering converting the factories into multiple companies on the lines of defence public sector undertakings (DPSUs) such as HAL (Hindustan Aeronautics Limited) and Bharat Electronics Limited (BEL).If the corporatisation does happen, the very DNA of the non-profit Ordnance Factory Board (OFB) and the 41 factories under it will change. For the first time, they will look for commercial returns from the products they manufacture.And that evokes as much trepidation as excitement.The origin and development of ordnance factories is linked with the British reign in India. In 1775, British authorities accepted the establishment of a Board of Ordnance in Fort William, Kolkata, marking the official beginning of army ordnance in India.More than a decade later, in 1787, a gunpowder factory was established at Ishapore which started production from 1791. Today, this unit houses RFI (Rifle Factory Ishapore).In 1801, a Gun Carriage Agency at Cossipore, Kolkata (today known as Gun & Shell Factory, Cossipore), was established and production started from March 18, 1802. This was the first industrial establishment of ordnance factories, which is officially considered the beginning of their journey.From there, multiple other facilities were established by the British and at the time of Independence, there were 18 ordnance factories in India. Four were established between 1947 and 1962 and thereafter 19 more units came up, taking the total to 41 as on date. All of these function under the Department of Defence Production (DoDP) ministry of defence (MoD).“Post-Independence, there has been a huge qualitative change in our production series and items. Before that, we were producing very old type of ammunition and had one factory for small arms. Especially after the 1962 war, we expanded our facilities and our production to include artillery, tanks, BMPs, electro-optics systems et al,” OFB chairman Saurabh Kumar told TOI.Ordnance factories, the OFB says, are immensely proud of their contribution during the wars of 1947-48, the 1962 Indo-China conflict, Indo-Pak wars of 1965 and 1971 and Kargil in 1999.“Our first real transformation came after the 1962 conflict with China. We grew in size and began setting up infrastructure for ammunition production — and then we had the 1965 and 1971 wars. In the 1980s, the tanks came in and our journey went on. The next big spurt came in 1999, during Kargil,” Kumar said.In 1972, the Centre awarded a Padma Shri to OP Bahl, a former additional director general of ordnance factories and member-OFB, for his efforts during the Indo-Pak war of 1971. Before that, another ordnance officer, KC Banerjee, had got a Padma Shri for the OFB’s contributions in the 1965 war.During Kargil, technical and operational difficulties were immense and the rate of ammunition expenditure and equipment attrition was very high. Artillery guns and small arms used in Kargil were either manufactured or supported by OFB.While the 105mm Indian Field Gun, or the Light Field Gun, and the 120mm, 81mm mortars, rocket launchers, assault rifles, grenades and all kinds of ammunition were fully manufactured by OFB, Bofors gun barrels and its parts were manufactured by the ordnance factories.“At the time of Kargil, our order book went up by more than 50% overall and in some cases, like ammunition, it went up by 200%. Post 26/11, it has been a more sustained growth. For nearly seven years, the turnover when you look at only ammunition, doubled. Now, we are focused on newer ammunition and ordnance that the army does not have,” Kumar added.“We’re now gearing up to absorb technological advancements of the 21st century to produce world class guns, ammunition and equipment, in order to keep pace with aspirations of the Indian armed forces while also working towards fulfilling the ‘Make in India’ initiative in a proactive manner,” Uddipan Mukherjee, joint director of OFB, told TOI.In a long list of indigenous productions that OFB mentions as its contributions to Make in India, one stands out: Dhanush, the first indigenous 155mm x 45 calibre artillery gun. It is a long-range artillery gun produced in India and the OFB handed it over to the army in April 2019.From tank engines to ammunition, and propellants to troops' comfort articles like boots and blankets, there is a long list of products being made in India.OFB signed a contract with the defence ministry on October 25, 2018 for up-gunning the existing 130mm M-46 artillery guns to 155 mmx45 calibre. OFB will up-gun 300 existing guns, which are to be supplied to the Army in four years. The OFB has also indigenously developed 155mmx52 Cal Mounted Gun System (MGS) in association with BEML and BEL.One piece of statistic often thrown at the OFB is that 80% of its orders come from the armed forces, giving it a captive audience, so to speak, and “no competition whatsoever”. The OFB says that is changing.“More importantly, we are looking at exports as we cannot be dependent on one customer. Export at present is hardly anything when you look at our entire turnover. But if you look at ammunition, 7% to 8% of the ammunition we make is exported. We hope to make it 10%,” Kumar said.While he did not name individual countries given the confidentiality clauses signed, he said most of the clients were in West Asia, Southeast Asia, Africa and Latin America. “There are also some big defence industries that are buying sophisticated hardware from us,” he added.OFB earned Rs 238 crore from exports in 2017-18 and is now exploring new markets in Africa and the developing world. One official said that was a major jump, considering the average exports per year over the past 10 years has not crossed Rs 50 crore.“Apart from exporting established products, OFB’s technological expertise is also leading to enquiries for new products which along with growth drivers would lead to a more visible footprint in the technical market. In this context, it is a matter of pride that 155mm barrels from OFB are being exported for testing purposes. This is recognition of OFB’s high-quality standards,” Mukherjee said.Kumar pointed out that the Centre, even in the existing structure of OFB, brought about some changes in the past 4-5 years. “Factories are now working on several new products and endeavouring to bring newer technologies,” he said.Complaint from the armed forces on ordnance purchases has been that the items are overpriced, sometimes inferior in quality and almost always delayed. And while the ordnance factories argue they are caught in the rules of a government set-up and grapple with inconsistent orders and repeated change of specifications of items, leading to delays, the defence ministry believes corporatisation is the way forward.INSAS rifles and the Arjun tank are two examples often thrown at the ordnance factories which, in turn, demand a level playing field, free from the stringent checks and controls of the ministry, including on R&D, and uncertainty of orders.The DoDP, which is playing the lead role in the proposed conversion, argues that corporatisation is unavoidable and a change would benefit both the OFB and the armed forces in the future, while making India more self-reliant.Multiple committees in the past 15 years — the most prominent being the one chaired by TKA Nair, former adviser to the Prime Minister — have recommended changing the business model of the OFB to bring about more accountability, enhance quality, reduce costs and boost turnover and exports.However, the 80,000-odd employees working at these factories see the move as only one step towards privatisation. Opposition began in July when news first broke that the Centre is actively considering corporatisation. The employees, led by three strong federations/unions, held a series of protests and a weeklong tools-down strike between August 20 and August 26 that brought production to a standstill.While the Centre managed a truce and convinced employees to withdraw their strike, which was initially declared for at least a month, the issue hasn’t died down.Kumar said, “Of course, the Centre as an owner will take a decision on what business model OFB should follow. It is not for us to speak about it. But I can definitely say one thing — functioning as a government department, we are bound by so many business rules whereas a company is always more flexible in decision making, which is a well-known fact."Union representatives, however, told TOI that the very first step taken by the government after they were promised continuous dialogue has happened without consultation with the three federations: The All India Defence Employees Federation (AIDEF), the Indian National Defence Workers Federation (INDWF) and the Bharatiya Pratiraksha Mazdoor Sangh (BPMS)."They haven't consulted us before finalising the terms of reference of the panel, while we were assured there will be a dialogue. We will come up with talking points to counter this," C Srikumar, general secretary, AIDEF, said.