Sunita Tools Limited has entered into an interim sales agreement to supply 240,000 empty NATO standard 155mm M107 artillery shells. The contract requires delivery at a rate of 10,000 units per month over a period of 24 months with some grace period. The agreement is non-exclusive allowing the company to allocate part of production to other customers as capacity permits.

Payment terms under the agreement provide for rolling 50 per cent advance covering three months' supply, with monthly supplies paid before delivery and adjusted against that month's advance. The company indicated that approximately Rs 240 million (mn) of monthly billing will commence once formalities are completed and the advance is received. Billing figures are expressed as Rs and monetary amounts are converted to million and abbreviated as mn thereafter.

The buyer is registered with the Department for Promotion of Industry and Internal Trade and will issue required DP02 documentation and accept supplies until the company's DPIIT registration is finalised. Initial supplies are expected to begin as soon as possible following prototype clearance and completion of pre delivery formalities. The interim agreement is expected to be converted to a full sales agreement after the prototype batch is cleared.

Sunita Tools noted that the order marks an inflection point in its strategy to expand international defence and aerospace operations and that the company will leverage its experience, technical team and manufacturing capacity to meet contractual quality and delivery expectations. The company highlighted its more than 36 years in engineering and mould base manufacturing and its capabilities in ground plates, mould bases and precision CNC machining that support aerospace and defence component production. The company also committed to provide after sales technical support and senior management engagement to address concerns promptly.