Indian Army Awards ₹2,565 Crore Overhaul Contract to AVNL for T-90 Tanks and BMP-2 Vehicles

New Delhi, September 5, 2025 — In a decisive push to modernize its armored forces and promote self-reliance in defence, the Indian Army has signed two major contracts worth ₹2,565 crore (around US $300 million) with the state-owned Armoured Vehicle Nigam Limited (AVNL). The contracts cover the comprehensive overhaul of 40 T-90 main battle tanks and 100 BMP-2 infantry combat vehicles, both of which remain the backbone of India’s mechanised warfare capability.

Scope of the Overhaul

The projects involve deep refurbishment to extend service life and enhance battlefield performance:

• T-90 Tanks: Overhauls will include replacement of worn-out engines and power packs, refurbishment of main gun systems, recalibration of fire-control systems, and upgrades to electronic and communication subsystems.

• BMP-2 Vehicles: Work will cover drivetrain restoration, refurbishment of turret and weapon stations, strengthening of amphibious features, and modernisation of vision devices, thermal imagers, and fire-control systems.

This deep-level maintenance ensures both fleets remain combat-effective for several more years while reducing downtime during deployments.

Strategic Importance

1. Modernisation without Gaps

While new platforms such as the Future Infantry Combat Vehicle (FICV) and advanced tank projects are under development, keeping the T-90s and BMP-2s fully operational ensures the Army maintains continuous readiness across both strike and pivot formations.

2. Push for Indigenisation

By awarding the entire project to AVNL, India reinforces its Atmanirbhar Bharat vision. The move strengthens domestic repair, spares production, and heavy vehicle maintenance capacity, reducing dependence on foreign manufacturers for mid-life upgrades.

3. Operational Readiness in Sensitive Theatres

With ongoing security challenges along the northern and western borders, particularly against Pakistan and China, the availability of overhauled tanks and infantry combat vehicles will directly boost the Army’s operational preparedness. Upgraded optics and fire-control systems will also improve night-fighting capability and enhance infantry–armour coordination.

AVNL: A Central Pillar

Formed after the corporatisation of the Ordnance Factory Board, AVNL has steadily become the Army’s long-term armoured lifecycle partner. The company already manages production, spares, and repairs for T-72, T-90, and BMP-2 fleets. These new contracts further establish its central role in India’s armoured ecosystem and position it strongly for future projects such as the FICV and indigenous light tank programmes.

Wider Defence Context

This announcement adds to a wave of indigenous defence modernisation efforts:

• In March 2024, a contract was signed to upgrade 693 BMP-2M vehicles with night-fighting and modern fire-control systems developed by DRDO and BEL.

• In July 2025, the Defence Acquisition Council cleared procurement of indigenous 1,350 HP engines for T-90 tanks, ensuring high performance in high-altitude regions.

• In August 2025, approvals worth ₹67,000 crore were cleared for modernisation, including advanced thermal-imager-based driver night sights for BMP fleets.

Together, these initiatives form part of a comprehensive modernisation roadmap balancing sustainment of legacy systems with induction of next-generation platforms.

The ₹2,565 crore contracts represent a strategic convergence of modernisation, indigenisation, and operational readiness. They ensure that India’s proven T-90 and BMP-2 fleets remain battle-ready even as new platforms are developed, while simultaneously strengthening the country’s domestic defence industrial base.

With this step, the Indian Army and AVNL move in tandem toward building a resilient, responsive, and self-reliant armoured warfare capability for the decades ahead.