Russia waives a royalty clause in favour of technology transfer which gives a green signal to the manufacture of AK 203 assault rifles at the Amethi factory. The deal worth Rs 5124 crore is expected to be signed in the coming months, with production expected to start next year.
As per sources, all issues regarding the cost and indigenisation content that had held back this project so far, now have been dealt with and a go-ahead has been given by defence ministry Rajnath Singh-led Defence Acquisition Council.
In earlier discussions, Russia had asked for a royalty on each rifle being produced in India which has been waived now and India will pay for technology transfer, waiving the royalty.
This decision would result in saving at least Rs 200 crore in the coming years and would ensure that India gets the know-how to produce modern assault rifles that can also be exported in the future.
According to the contract, 70000 rifles will be imported directly from Russia while 601427 will be produced by an OFB-Kalashnikov joint venture.
