Defence Ministry inks pact with TPCL, L&T and BEML

Ministry of Defence signed contracts with select domestic companies for the supply of various defence-related equipment on Monday.

As per the press release from the ministry, these contracts are aimed to make a shift towards nearly 70 per cent indigenous manufacturing of defence material.

On Monday, Defence Ministry entered into an agreement with BEML Limited, Tata Power and L&T supply of ‘six Pinaka regiments’, which is a rocket regiment of Indian Army, to the Regiment of Artillery of the Indian Army at an approximate value of Rs 2,580 crore.

Tata Power and L&T will have a scope of work in the manufacturing of Automated Gun Aiming & Positioning System (AGAPS) and 45 command posts, respectively. BEML, on the other hand, will have the work of manufacturing 330 vehicles under the stated contract. Defence Ministry expects the induction of ‘six Pinaka regiments’ by 2024.

The exact distribution of the order value is not mentioned by the ministry. However, the press release submitted by BEML mentioned that its share would be Rs 842 crore in the given contract. BEML Ltd has nearly 14 per cent share in revenue from the defence segment, depicting further strength after this contract. On the other hand, L&T reported a 3 per cent share of defence contracts in its order book as of the end of the first quarter of FY21.

To boost the defence sector, earlier in August 2020, Defence Minister Rajnath Singh banned the import of 101 defence items with an aim to boost the defence sector. There are plans to implement a ban on import between 2020 and 2024. With this ban, the domestic industry is likely to get contracts worth Rs 4,00,000 crore in the next six to seven years.