India and Russia have finalised a major deal for manufacturing AK-203 rifles in India during Defence Minister Rajnath Singh's ongoing visit to Moscow, the official Russian media reported on Thursday.
The AK-203 is the latest and most advanced version of the AK-47 rifle, which will replace the Indian Small Arms System (INSAS) 5.56x45 mm assault rifle.
The Indian Army has a requirement for around 770,000 AK-203 rifles, of which 100,000 will be imported and the rest will be manufactured in India, Russia's state-run Sputnik news agency said.
The Ministry of Defence, in a statement, said: "Both sides welcomed the advance stage of discussions for the establishment in India of an India-Russian Joint Venture for the production of AK-203 assault rifles which are considered one of the most modern weapons available for infantry forces.
This provides a very positive basis for further engagement of Russian defence industry in the 'Make-in-India' programme, it said.
Gen. Shoigu reiterated the commitment of the Russian side to engage actively with our MOD to ensure the success of the 'Make-in-India' programme, the statement added.
The rifles will be manufactured in India as part of the joint venture Indo-Russia Rifles Private Limited (IRRPL), established between the Ordnance Factory Board (OFB), the Kalashnikov Concern and Rosoboronexport -- the Russian state agency for military exports, it said.
The OFB would own a majority stake of 50.5 per cent in IRRPL while the Kalashnikov Group would have a 42 per cent share. Russia's state-owned export agency, Rosoboronexport, would own the remaining 7.5 per cent, the report said.
The 7.6239 mm Russian weapon will be produced at the Korwa Ordnance Factory in Uttar Pradesh, which was inaugurated by Prime Minister Narendra Modi last year, the report said.
The cost per rifle is expected to be around $1,100, including the cost of technology transfer and of setting up the manufacturing unit, according to the report.
The INSAS, which has been uses since 1996, has developed some issues such as jamming and magazine cracking at higher altitudes in the Himalayas, the Sputnik report said.