L&T dips toe into arms market

Engineering and construction major Larsen & Toubro is planning to foray into arms and ammunition to widen its defence equipment portfolio. The company will initially manufacture small arms and later graduate to ammunition, including explosives.

It will be the first private Indian player to produce arms and ammunition and has secured the necessary licence from the Centre.

At present, the state-run Ordinance Factory is the only manufacturer of small arms supplied to the government.

Larsen & Toubro is in talks with two European companies for a technological tie-up in this field.

"The technological tie-up has yet to be finalised. The arms and ammunition will cater primarily to the demands of the government," said a Larsen & Toubro executive, confirming the development.

He pointed out that it would also explore business opportunities from abroad at a later stage.

The company has already acquired 240 acres of land in Coimbatore in Tamil Nadu, which will house component manufacturing for small arms. Sources said the company was planning an assembly unit near Mumbai for small arms.

Larsen & Toubro has already firmed up production and design of various defence equipment such as rockets, torpedoes, mines, weapons platforms, launchers and anti-tank weapon systems.

"We also have plans to develop air defence products, including sensors and radars," a company executive said.

In 2001, India opened the defence industry to private investment and allowed foreign direct investment of up to 26 per cent in select areas.

Some of the major non-public sector industry participants supplying defence equipment and services include Mahindra & Mahindra, the Tata group, Kirloskar Brothers, Ashok Leyland, Jindal, Max Aerospace & Aviation and Ramoss India.