Indian Ordnance Factories Organisation is the largest departmentally run industrial undertaking in the country and is primarily engaged in the manufacture of armaments, ammunition, transport vehicle, armoured vehicle, clothing and spares required for equipment for the three services. Today, there are 39 Ordnance Factories under the Ordnance Factory Board with its headquarters in Calcutta. The 40th Ordnance Factory has been planned at Nalanda in Bihar. Over 1.47 lakh dedicated work force are working in this vast organisation.

From a government subsidy of Rs 690 crores during 1997-98, brought down to Rs 8 crores in 1998-99, Ordnance Factories have recorded a surplus (revenue over expenditure) of Rs 780 crores during 1999-2000 - an all-time record. The performance of Ordnance Factories during the preceding years has been commensurate with the requirements of various major indenters i.e., Defence Services and Ministry of Home Affairs. The production in Ordnance Factories has been steadily growing over the years. Due to enhanced requirement during Kargil operation, the output during 1999-2000 increased from 33 per cent to 900 per cent for ammunition items, 20 per cent to 108 per cent in clothing items and 76 percent to 233 per cent for cables. An overall increase in value of issues of 34.6 per cent over the previous year was achieved in 1999-2000.