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India's largest power and transmission equipment manufacturer, state-owned Bharat Heavy Electricals Limited, is planning to produce defence equipment, including weapons.
It is likely to manufacture all types of guns, including field guns, air defence guns, and mortars for the Indian defence sector and para-military forces. The listed company has also firmed up plans to produce underwater weapon systems, weapon control solutions and its components.
Sources said the company had already applied for a licence to produce defence products. BHEL executives confirmed the development but declined to divulge details.
At present, Ordnance Factory Board is the only public sector undertaking that manufactures arms and ammunition.
In the defence space, BHEL will have to compete with leading private players such as Larsen & Toubro, Tata Power, Mahindra & Mahindra, Godrej Industries, Kirloskar Brothers, Ashok Leyland, Jindal, Max Aerospace & Aviation and Ramoss India.
According to industry analysts, defence production is turning lucrative as the defence sector is augmenting its weapon infrastructure.
"Moreover, the companies, which have secured a licence will benefit from the offset policy announced by the Ministry of Defence. According to the offset policy, overseas players bagging Indian defence contracts will have to source 30 per cent of the defence requirements through Indian companies," they added.
"BHEL has plans to enter defence avionics by manufacturing all types of components for unmanned air vehicles, aerostats, and unmanned aerial combat vehicles. The company will also make necessary air-borne assemblies and related systems," a source said.
The public sector company is also looking at a range of other defence items such as rocket launchers, defence electronics, torpedoes and components of armoured and combat vehicles.
The investment for the proposed defence foray was not disclosed.