Army projected an urgent requirement for 93,895 CQBs and United Arab Emirates-based Caracal was the lowest bidder for the tender being processed through the Fast Track Procurement (FTP).
The deals for 72,400 assault rifles and 93,895 carbines were approved by the Defence Acquisition Council (DAC) in January 2018. While the deal for assault rifles was concluded, with Sig Saur and SIG 716 assault rifles delivered to the Army, the CQB deal was held up.
Defence Ministry has decided to cancel two tenders of the Army, worth about $2.5 bn, for Close Quarter Carbines (CQB) and Self Propelled Air Defence Gun Missile System (SPAD-GMS) which have been held up for sometime, a defence source said.
The decision was taken at a meeting chaired by the Defence Secretary, the source said.
Army wants five regiments of the SPAD-GMS that can provide mobile air defence cover to advancing troops. After extensive trials, which involved contenders from Russia and South Korea, K-30 Biho from Hanwha Defense of South Korea was shortlisted. Both Russian systems that were pitched, the upgraded Tunguska M1 and Pantsir, had failed to meet the requirements.
Contract negotiations were delayed after Russia lodged a protest with the Defence Ministry and the case was referred to the Internal Committee.
This decision to cancel the CBQ deal was welcomed by several Indian companies for them an opportunity to participate their domestically built arms, a company executive said.
Recently, several Indian companies had written to Defence Minister Rajnath Singh requesting a level playing field for their products in the small arms segment. In the last few years, several Indian companies have invested in the small arms segment, given the large requirement and efforts by the Government to open up ammunition to the private sector, and have started production as well.