Ordnance Factory Board

The Ordnance Factory Board (OFB) was the government body that managed India's 41 ordnance factories, manufacturing ammunition, weapons, vehicles, clothing, and equipment for the Indian Armed Forces. In October 2021, the OFB was dissolved and its factories were corporatised into seven new Defence Public Sector Undertakings (DPSUs), transforming them from government departments into commercial entities. Understanding the OFB's legacy and the successor organisations is essential for anyone bidding in India's defence supply chain.

What is Ordnance Factory Board in government procurement?

The ordnance factories under OFB were among the oldest industrial establishments in India, some dating back over 200 years to the British era. They supplied the bulk of the Indian Army's basic requirements: 155mm artillery ammunition, small arms ammunition, assault rifles, artillery guns, infantry combat vehicles, military clothing and personal equipment, and optical instruments.

The transition from OFB to seven DPSUs was driven by the need for commercial accountability. As government departments, the ordnance factories operated under government financial rules with limited flexibility, slow procurement cycles, and no profit motive. As DPSUs, they operate under company law, have commercial boards, can enter JVs with private companies, can export, and must compete for orders rather than having them allocated by the government.

The seven successor companies are:

Munitions India Limited (MIL), ammunition and explosive products. Advanced Weapons and Equipment India Limited (AWEIL), small arms and light weapons. Troop Comforts Limited (TCL), clothing, personal equipment, and general stores. Yantra India Limited (YIL), artillery, anti-aircraft guns, and field engineering equipment. India Optel Limited (IOL), optical and electro-optical devices. Gliders India Limited (GIL), parachutes, paratroopers' equipment, and load carriers. Armoured Vehicles Nigam Limited (AVNL), armoured vehicles, military bridges, and infantry fighting vehicles.

Each company runs its own procurement portal and tendering process for raw materials, components, and services, in addition to selling finished products to the armed forces under government-negotiated prices.

Why it matters for bidders

The corporatisation of OFB created a large new buyer in the Indian defence supply chain that operates under more commercial norms than before. The seven DPSUs collectively procure thousands of crores worth of raw materials (special steels, aluminium alloys, explosives, chemicals), components, and sub-assemblies from Indian industry annually.

Before corporatisation, OFB procurement happened under government rules that private companies found difficult to navigate. The DPSUs now follow standard commercial procurement practices closer to those of private companies, faster processing, more transparent evaluation, and greater flexibility in specification. This makes them more accessible to private sector bidders.

Private companies that can supply high-specification materials, RDX, HMX, propellants, special-purpose forgings, precision machined components, optical glass, to the DPSUs have a significant captive market. Getting onto the approved vendor list of the relevant DPSU is the entry requirement, followed by standard open tender or limited tender processes.

Example

A private steel company supplying special-grade ordnance steel (as per IS/JSS specifications) approaches Yantra India Limited to get on the approved vendor list. YIL's technical team evaluates the steel plant's process capability, tests sample heats against JSS specifications, and adds the company to the approved list. Subsequently, whenever YIL floats a tender for ordnance steel, the company can bid. On winning the contract, the company receives regular purchase orders across the financial year, providing steady revenue from a high-value, niche product that very few companies can supply.

Key rules / thresholds

The DPSUs operate under the Companies Act 2013, not GFR 2017. However, because they are government-owned companies, CVC guidelines on procurement integrity apply. Major procurement (above threshold values set by each company's board) is published on their portals. Export of defence products by DPSUs requires a No Objection Certificate from the Ministry of Defence and compliance with the Foreign Trade Policy's defence export provisions.