The United Arab Emirate's small arms producer Caracal has now upgraded the deal to supply around 94,000 carbines to the Indian Army. In the latest offer, the Abu Dhabi-based company has offered to build 93,895 carbines fully in India. The carbines are aimed at replacing obsolete 9 mm British Sterling 1A1 sub-machine guns that are currently in service. Moreover, to be able to start production immediately, CARACAL has already established the necessary property, facilities, and local partners, the company said in a statement.
More than 20 percent of the components installed on the CAR 816 are already manufactured in India, with Caracal now committing to fully produce in-country rifles, in line with the initiative 'Make in India.' Caracal has also offered to transfer technology in this deal.
In an official statement, the company said, "Over 20 percent of the components fitted on the CAR 816 are already made in India, with CARACAL now making a commitment to fully manufacture the rifles in-country, in alignment with the 'Make in India' initiative. The initiative will also see CARACAL oversee technology transfer."
Notably, the company owned by the UAE government has been negotiating through diplomatic channels as well. UAE embassy in New Delhi has learned to have aggressively pitched the idea to locally manufacture the carbines.
What is the Caracal deal and its progression?
For more than 3 years, the Indian Army has been looking to procure a new close quarter battle (CQB) carbines. The program was mooted as fast track procurement and Caracal, the UAE based manufacturer, finished as 'L-1' or the lowest bidder in September 2018. However, the deal ran into trouble due to overpricing issues and later representation by the Defence Research and Development Organisation (DRDO), and local small arms industry who were looking to grab the deal.
Policy intervention by Modi Government
In August 2020, the Modi government announced a ban on the import of 101 defense equipment to spur growth in India's manufacturing sector under the 'Atmanirbhar Bharat' initiative. The rationale behind such a step to buying local equipment that can be manufactured in India. As per media reports, the government was thinking of scrapping the deal to import carbines from UAE. The latest offer by the UAE firm looks attractive but undermines the Modi governments' commitment to encourage local manufacturing.