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Indian Army Urges Defence Ministry to Resolve Bottlenecks in Explosive Licence Conversion
The Indian Army has formally asked the Ministry of Defence (MoD) to intervene in a long‑standing problem that has kept almost 40 explosive licences idle. The licences, issued between 2022 and 2024, were intended to boost domestic ammunition production but only 15‑17 % of the holders have moved beyond the licence stage to build manufacturing facilities.
Sources in the Army explain that the conversion rate is hampered by a combination of financial, logistical and regulatory hurdles. “The licence holders realise that they need a large, isolated plot of land with sufficient water supply, and the cost of establishing a plant is prohibitive,” a former chief executive of a state‑owned ammunition PSU said. The lack of in‑house technology means that foreign suppliers would have to be engaged, which could cost between ₹200 crore and ₹400 crore. The time required to complete the entire process is also cited as a deterrent.
The Army has briefed senior MoD officials, including the Department of Defence Production, about these obstacles. The ministry, however, has adopted a policy that encourages private defence manufacturers to compete in the explosives and munitions domain, mirroring the approach taken in aviation and missile production. Munitions India Limited, a state‑owned PSU, remains the only monopoly in the sector. Private firms that have obtained licences include Adani Defence & Aerospace, Premier Explosives Ltd, Solar Industries India Ltd, SMPP Ammunition Private Ltd, HBL Engineering Ltd and Hughes Precision Manufacturing Private Ltd.
Despite the challenges, the Army has reported a 91 % self‑sufficiency rate in ammunition, having indigenised 159 of the 175 variants in its inventory. The achievement, announced by Business Line in December 2025, is a key milestone in India’s “Make in India” defence push. The domestic market for military ammunition and high‑grade explosives has grown to more than ₹7,000 crore, driven by border tensions after Ops Sindoor, the introduction of modern weapon platforms and the global surge in munitions demand following the 2022 Russia‑Ukraine war.
Industry insiders point to policy constraints that further slow progress. A senior officer of a private ammunition company said that the MoD’s requirement for 60 % indigenous content in procurement contracts is difficult to meet because many components are still imported. The same officer added that a two‑year timeline for full indigenisation is “exigent” and that financial assistance would be needed to establish new plants.
A senior functionary from the private sector suggested that the government could set up dedicated facilities for producing primers and single‑ and double‑based propellants. “If the state builds a plant that supplies these critical inputs, all Indian companies would become dependent on it, eliminating the need to import from foreign vendors,” the functionary said. The suggestion also addresses the reluctance of foreign original equipment manufacturers to transfer technology, a concern that has been raised repeatedly in industry circles.
The Army’s appeal to the MoD comes at a time when the country’s ammunition ecosystem is shifting from import dependency to self‑reliance. The Ministry’s response has not yet been publicised, but officials are reportedly reviewing the feasibility of providing financial and policy support to licence holders. The Army has also highlighted the need for clearer guidelines on land acquisition, water rights and risk mitigation for explosive manufacturing.
In the coming weeks, the MoD is expected to outline a strategy that balances the need for rapid indigenisation with the practical constraints faced by private firms. The outcome will determine whether India can sustain its ammunition self‑sufficiency gains in the face of fluctuating global demand and evolving security challenges.
Sources in the Army explain that the conversion rate is hampered by a combination of financial, logistical and regulatory hurdles. “The licence holders realise that they need a large, isolated plot of land with sufficient water supply, and the cost of establishing a plant is prohibitive,” a former chief executive of a state‑owned ammunition PSU said. The lack of in‑house technology means that foreign suppliers would have to be engaged, which could cost between ₹200 crore and ₹400 crore. The time required to complete the entire process is also cited as a deterrent.
The Army has briefed senior MoD officials, including the Department of Defence Production, about these obstacles. The ministry, however, has adopted a policy that encourages private defence manufacturers to compete in the explosives and munitions domain, mirroring the approach taken in aviation and missile production. Munitions India Limited, a state‑owned PSU, remains the only monopoly in the sector. Private firms that have obtained licences include Adani Defence & Aerospace, Premier Explosives Ltd, Solar Industries India Ltd, SMPP Ammunition Private Ltd, HBL Engineering Ltd and Hughes Precision Manufacturing Private Ltd.
Despite the challenges, the Army has reported a 91 % self‑sufficiency rate in ammunition, having indigenised 159 of the 175 variants in its inventory. The achievement, announced by Business Line in December 2025, is a key milestone in India’s “Make in India” defence push. The domestic market for military ammunition and high‑grade explosives has grown to more than ₹7,000 crore, driven by border tensions after Ops Sindoor, the introduction of modern weapon platforms and the global surge in munitions demand following the 2022 Russia‑Ukraine war.
Industry insiders point to policy constraints that further slow progress. A senior officer of a private ammunition company said that the MoD’s requirement for 60 % indigenous content in procurement contracts is difficult to meet because many components are still imported. The same officer added that a two‑year timeline for full indigenisation is “exigent” and that financial assistance would be needed to establish new plants.
A senior functionary from the private sector suggested that the government could set up dedicated facilities for producing primers and single‑ and double‑based propellants. “If the state builds a plant that supplies these critical inputs, all Indian companies would become dependent on it, eliminating the need to import from foreign vendors,” the functionary said. The suggestion also addresses the reluctance of foreign original equipment manufacturers to transfer technology, a concern that has been raised repeatedly in industry circles.
The Army’s appeal to the MoD comes at a time when the country’s ammunition ecosystem is shifting from import dependency to self‑reliance. The Ministry’s response has not yet been publicised, but officials are reportedly reviewing the feasibility of providing financial and policy support to licence holders. The Army has also highlighted the need for clearer guidelines on land acquisition, water rights and risk mitigation for explosive manufacturing.
In the coming weeks, the MoD is expected to outline a strategy that balances the need for rapid indigenisation with the practical constraints faced by private firms. The outcome will determine whether India can sustain its ammunition self‑sufficiency gains in the face of fluctuating global demand and evolving security challenges.
