NEW DELHI — India has cleared purchase of four additional P-8I maritime surveillance aircraft for US $1 billion from Boeing, which awaits the signing of another $2.5 billion contract to purchase attack and heavy-lift helicopters, said a Ministry of Defence source.
The Defence Acquisition Council (DAC), the highest body in the MoD that decides weapons procurement, at its Tuesday meeting cleared the purchase of additional P-8I aircraft Tuesday on a government-to-government basis to top the eight already contracted in 2009.
The Indian Navy last year decided to invoked go in for the option clause in the contract under which it could can place an order for four more additional P-8Is. The P-8I is the Indian variant of the P-8A.
Earlier this month, Boeing of U.S. extended its price quote for the 12th time for a $2.5 billion tender involving the sale of 22 Apache and 15 Chinook helicopters to India. Boeing won the tender in a global competition in 2013 but the contract has not been finalized.
The MoD sources said the helicopter tender should be completed is likely to be inked in the next three months as an issue the stumbling block relating to offset fulfillment has been was resolved. Boeing had did not provided all necessary documents related to the offset requirements, but MoD said it is now satisfied with the documentation and that Boeing will fulfill offsets amounting to 30 percent of the total value of the contract.
"There is nothing holding back the contract further," the source added
An Indian Air Force official said that Boeing is extending the price quote because it sees further orders for heavy-lift and attack helicopters.
Chinooks are required for the two new mountain divisions being raised by the Indian Army, where these helicopters will be used to transport men and materiel, including light utility howitzers, the Air Force official added.
Chinook will replace Russian-made Mi-26 heavy-lift helicopters, while the Apache attack helicopters will replace Russian-made Mi-28 platforms currently stationed along the border with Pakistan, the official added.
In reply to a question about why Boeing is extending the price quote, an executive of Boeing here said, "Boeing is deferring all questions on the Chinook and Apache procurement to India's Ministry of Defence for comment." The executive , however, would not elaborate on this.
As the DAC has now cleared the purchase of the P-8I aircraft and had earlier cleared the purchase of Apache and Chinook acquisition, helicopters, what remains now is approval by the Cabinet Committee on Security is all that remains. This will pave the way for the signing of the contract. Both the P-8I and helicopter contract will be signed in the next three months, the MoD source said.
Boeing's Apache was selected in open competition over the Russian Mi-28N Night Hunter, while the Chinook heavy-lift helicopter was picked over the Russian Mi-26 helicopter.
In the last decade, India has contracted aircraft worth $10 billion, including P-8I, C-130J Super Hercules and C-17 Globemaster aircraft.