Moscow: India finalised a major deal with and Russia on Thursday for the manufacturing of AK-47 203 rifles during Defence Minister Rajnath Singh's visit to the country, the Russian media reported quoting official sources.


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The Indian Army has a requirement of 7,70,000 AK-47 203 rifles, of which 1,00,000 will be imported and the rest will be manufactured in India.


The AK-47 203 is the latest and most advanced version of the AK-47 rifle, which will replace the Indian Small Arms System (INSAS) 5.56x45 mm assault rifle.


The Ministry of Defence issued a statement, saying: "Both sides welcomed the advance stage of discussions for the establishment in India of an India-Russian Joint Venture for the production of AK203 assault rifles which are considered one of the most modern weapons available for infantry forces."


The statement further said, "Gen. Shoigu reiterated Russia's commitment to engage actively with our MOD to ensure the success of the 'Make-in-India' programme." This provides a very positive basis for further engagement of Russian defence industry in the 'Make-in-India' programme, the statement said.


The Russian state agency for military exports informed that the rifles will be manufactured in India as part of the joint venture Indo-Russia Rifles Private Limited (IRRPL), established between the Ordnance Factory Board (OFB), the Kalashnikov Concern and Rosoboronexport. 


The OFB would own a majority stake of 50.5 per cent while the Kalashnikov Group would have a sahre of 42 per cent. Rosoboronexport, Russia's state-owned export agency, would own the remaining 7.5%.


The Russian weapon will be produced at the Korwa Ordnance Factory in Uttar Pradesh, which was inaugurated by Prime Minister Narendra Modi last year.


The cost of per rifle is expected to be around $1,100 which  includes the cost of technology transfer and of setting up the manufacturing unit.