High prices, limited choice shoot down OFB’s gun export potential

Vijay Mohan

Tribune News Service

Chandigarh, September 14

Only around 35 lakh people in India hold gun licences not only because of several regulatory impediments but also due to limited choice and high prices. They can either purchase old weapons imported more than three decades ago or buy new firearms made by public sector Ordnance Factory Board (OFB).

According to the industry, Punjab is the third largest state to hold maximum gun licences after Uttar Pradesh and Jammu & Kashmir. Mohali-based Bhandari Gun House proprietor Akash Deep Bhandari says Punjab and Haryana are lucrative markets. “However, due to ban on import of foreign firearms, people can buy weapons made by OFB only, which are nowhere in terms of quality as compared to foreign firearms,” he said.

The high prices of weapons produced by OFB for the civilian market also limit their export potential and in turn, impacting the government’s efforts to promote products manufactured by Indian defence establishments in the international market.

The .32 revolver, OFB’s best selling civilian weapon, is priced 12 times the minimum cost of a weapon in the same class that is available overseas, according to a comparative cost study done by the OFB. Depending upon the demand, 12,000-13,000 revolvers are sold to civilians annually, sources said.

The cost of a .32 pistol is over four times that of the minimum international price while the .22 and .30-06 sporting rifles are priced 2-3 times higher, the study said.

The prime reason for the high prices of OFB’s weapons is stated to be the high production costs incurred by the world's largest government-operated production organisation that consists of 41 factories spread across the country.

Ordnance factories are expected to recover the cost of production from sales to the armed forces, while from other clients in the open market they are free to make profits. The civil trade accounts for about 8-10 per cent of OFB sales. Individuals possessing a valid arms licence can purchase specified non-prohibited bore weapons directly from the OFB or through authorised dealers.

The cost of production in OFB comprises direct material, direct labour and overheads. In 2017, the Comptroller and Auditor General (CAG) pointed out that overheads accounted for 30% of the cost of production in OFB, which was “particularly high.”

Businessmen, builders, bank security staff, progressive farmers and senior executives in Punjab, Haryana and Himachal Pradesh buy revolvers and pistols for personal safety made by OFB as the Indian government banned the import of firearms in 1986.

Price comparison

(in USD)

Weapon

Minimum international Price

OFB price

.32 Revolver

99

1,172

.32 Pistol

295

1,278

.22 Sporting rifle

305

701

.30-06 Sporting rifle

500

1,580