Army offers ₹75,000 crore, five-year order pipeline to defence industry to spur long-term growth
In a significant shift aimed at giving India’s defence manufacturing ecosystem long-term business certainty, the Indian Army has decided to place five-year restoration and modernisation orders worth over ₹75,000 crore for its ageing fleet of Soviet-origin tanks and armoured vehicles. The move addresses a long-standing demand of the defence industry, including public sector undertakings and MSMEs, which have argued that sustained order visibility is essential for investing in capacity, technology and supply chains
Industry executives have maintained that companies cannot build manufacturing capabilities or expand supplier networks on the basis of short-term contracts, particularly when their primary customer is the armed forces. The five-year commitment is expected to provide the assurance needed for vendors to invest in production lines, skilled manpower and indigenisation, while reducing dependence on imports
The orders cover life-cycle enhancement of the Army’s T-72 ‘Ajeya’ and T-90 ‘Bhishma’ tanks, infantry combat vehicles (BMPs) and Armoured Recovery Vehicles (ARVs). The restoration programme is designed to bring these platforms to a “near-zero-hour and zero km state of operational readiness” by replacing worn-out mechanical, electronic and engineering systems and significantly extending their operational life
Army sources said the upgraded platforms will retain only their basic structures while receiving new-generation equipment. For the first time, the tanks will also be equipped with drones for intelligence, surveillance, reconnaissance and combat roles, reflecting lessons drawn from the Russia-Ukraine conflict. The overhaul will involve replacement of components, sub-assemblies and assemblies wherever required and is also expected to reduce import dependence for maintenance and spares
Under the programme, 790 T-72 tanks will be restored over five years at a cost of more than ₹13,000 crore. Defence PSU Armoured Vehicles Nigam Ltd (AVNL), through its Vehicle Factory Jabalpur, will execute the programme with support from an ecosystem of around 1,200 MSMEs and startups. AVNL completed restoration of two T-72 tanks as a pilot project earlier this year.
Another 200 T-90 tanks will undergo phased restoration over the next five years at an estimated cost of ₹56,000 crore. The army has also cleared the modernisation of 500 BMP infantry combat vehicles at a cost of under ₹5,000 crore. The work will be undertaken by AVNL’s Ordnance Factory Medak, which has achieved over 90% indigenisation.
In addition, the army has approved the restoration of 230 Armoured Recovery Vehicles over five years at a cost of ₹1,400 crore. Built by Bharat Earth Movers Ltd (BEML), these vehicles play a critical role in recovering and repairing tanks on the battlefield.
In a significant shift aimed at giving India’s defence manufacturing ecosystem long-term business certainty, the Indian Army has decided to place five-year restoration and modernisation orders worth over ₹75,000 crore for its ageing fleet of Soviet-origin tanks and armoured vehicles. The move addresses a long-standing demand of the defence industry, including public sector undertakings and MSMEs, which have argued that sustained order visibility is essential for investing in capacity, technology and supply chains
Industry executives have maintained that companies cannot build manufacturing capabilities or expand supplier networks on the basis of short-term contracts, particularly when their primary customer is the armed forces. The five-year commitment is expected to provide the assurance needed for vendors to invest in production lines, skilled manpower and indigenisation, while reducing dependence on imports
The orders cover life-cycle enhancement of the Army’s T-72 ‘Ajeya’ and T-90 ‘Bhishma’ tanks, infantry combat vehicles (BMPs) and Armoured Recovery Vehicles (ARVs). The restoration programme is designed to bring these platforms to a “near-zero-hour and zero km state of operational readiness” by replacing worn-out mechanical, electronic and engineering systems and significantly extending their operational life
Army sources said the upgraded platforms will retain only their basic structures while receiving new-generation equipment. For the first time, the tanks will also be equipped with drones for intelligence, surveillance, reconnaissance and combat roles, reflecting lessons drawn from the Russia-Ukraine conflict. The overhaul will involve replacement of components, sub-assemblies and assemblies wherever required and is also expected to reduce import dependence for maintenance and spares
Under the programme, 790 T-72 tanks will be restored over five years at a cost of more than ₹13,000 crore. Defence PSU Armoured Vehicles Nigam Ltd (AVNL), through its Vehicle Factory Jabalpur, will execute the programme with support from an ecosystem of around 1,200 MSMEs and startups. AVNL completed restoration of two T-72 tanks as a pilot project earlier this year.
Another 200 T-90 tanks will undergo phased restoration over the next five years at an estimated cost of ₹56,000 crore. The army has also cleared the modernisation of 500 BMP infantry combat vehicles at a cost of under ₹5,000 crore. The work will be undertaken by AVNL’s Ordnance Factory Medak, which has achieved over 90% indigenisation.
In addition, the army has approved the restoration of 230 Armoured Recovery Vehicles over five years at a cost of ₹1,400 crore. Built by Bharat Earth Movers Ltd (BEML), these vehicles play a critical role in recovering and repairing tanks on the battlefield.
