Bharat Forge Carbine Deal Fuels ₹14,000 Crore Defence Push

Bharat Forge Limited has secured a significant portion of a major defence contract, marking a new phase in its expansion as a key private-sector player in India's defence manufacturing ecosystem. Baba Kalyani, the company's Chairman and Managing Director, confirmed that Bharat Forge will receive 60% of a ₹2,770 crore order for close-quarter carbines. This development not only strengthens the company's order book but also reinforces its position at the forefront of India's 'Atmanirbhar Bharat' initiative in defence.

A Landmark Carbine Contract

The Indian Army's order for 4.25 lakh Close-Quarter Battle (CQB) carbines is one of the largest small arms deals awarded to domestic manufacturers. As the L1 bidder, Bharat Forge is set to be the primary supplier for this next-generation weapon. The CQB carbine, a compact 5.56x45 mm rifle, is designed for short-range combat and counter-insurgency operations, aiming to upgrade soldier kits for enhanced mobility and reliability in complex battlefield scenarios. The contract underscores the growing trust in indigenous capabilities to meet the armed forces' critical requirements.

Production and Indigenous Development

The carbine has been designed and developed in partnership with the Armament Research and Development Establishment (ARDE) under the Defence Research and Development Organisation (DRDO). According to Kalyani, this collaboration ensures the product is entirely indigenous. Production will be scaled up over the next four to five months at a dedicated facility in Jejuri, near Pune. The plant currently has a capacity of 50,000–60,000 weapons annually, which can be increased to meet demand. A key feature of the design is the interchangeability of components, which simplifies maintenance and logistics for the Indian Army.

Financial Implications and Market Outlook

The announcement had a positive impact on the company's stock, which gained nearly 5% following the news. This contract significantly boosts Bharat Forge's defence order book, which currently stands at approximately ₹10,000 crore. Kalyani projects that this figure could rise to between ₹12,000 crore and ₹14,000 crore by the end of fiscal year 2025-26 (FY26). The company's defence vertical has already shown remarkable growth, with revenue surging fourfold to ₹1,561 crore in FY24, over 90% of which came from exports. This robust pipeline provides strong revenue visibility for the coming years.

Bharat Forge's Defence Order Book at a Glance

Strategic Diversification: Beyond Artillery

While artillery systems have been a cornerstone of its defence business, Bharat Forge is actively diversifying its portfolio. Kalyani highlighted that future investments will focus on drones, unmanned aerial vehicles (UAVs), and anti-drone systems, with new facilities planned in Bengaluru. The company is also making inroads into the naval sector by developing naval guns, unmanned naval systems, and an indigenously designed propulsion system for ships, a first for India. Furthermore, its joint venture with an Israeli partner is expected to benefit from approvals for SPICE 1000 guidance kits.

A Decade-Long Journey in Defence

Bharat Forge's success was not achieved overnight. Baba Kalyani recalls the initial skepticism the company faced. At the 2012 DefenceExpo, its first indigenously developed artillery gun was met with indifference, as the defence establishment was heavily reliant on imports. The idea to enter defence manufacturing originated around 2011, leveraging the company's deep expertise in metallurgy and forging. Kalyani noted that weapon systems are fundamentally complex forging projects, making it a natural transition for the company.

The Turning Point: Policy Reforms and Leadership

The real breakthrough came with the 'Make in India' campaign launched in 2014 and the subsequent reforms under the late Defence Minister Manohar Parrikar. In 2016, Parrikar's policy changes opened up testing facilities for the private sector and streamlined procurement processes, which Kalyani credits as a pivotal moment. Before these reforms, getting permission to even test a privately manufactured gun was a significant hurdle, a process that took years in India compared to weeks in the U.S.

Consolidating for Growth: The Role of KSSL

To sharpen its focus, Bharat Forge is consolidating its entire defence vertical into its wholly-owned subsidiary, Kalyani Strategic Systems Limited (KSSL). KSSL has secured a license from the Department for Promotion of Industry & Internal Trade (DPIIT) to manufacture a wide range of defence products at its Jejuri unit. The subsidiary has already secured export orders worth $155.5 million and has been instrumental in exporting India's first indigenously developed artillery systems.

The Broader Push for Self-Reliance

Bharat Forge's growth aligns with the Indian government's ambitious goals for the defence sector. The government aims to triple defence production to ₹3 lakh crore and double exports to ₹50,000 crore by FY29. The increasing contribution of private companies, which accounted for 22% of total defence production in FY24, is crucial to achieving these targets. Kalyani has advocated for further reforms, including a dedicated R&D budget for the private sector and improved export credit facilities, to accelerate this momentum.

Conclusion: Forging a New Defence Legacy

From facing skepticism a decade ago to becoming a prime contractor for the Indian Army, Bharat Forge has transformed itself from a components supplier into a full-fledged defence original equipment manufacturer (OEM). The recent carbine contract is a testament to its persistence, technological capability, and alignment with national strategic goals. As it expands into new domains like drones and naval systems, Bharat Forge is poised to play an even larger role in shaping India's future as a self-reliant and globally competitive defence manufacturing hub.