India Requires Russia, S. Korea to Partner With Local Firms in Helo Contest

"MoD's decision to buy LUH only through competition from domestic vendors is a virtually rejection of any government-to-government helicopter production deal between India and Russia," said defense analyst Nitin Mehta, defense analyst here.

The MoD source, however, said the decision not to enter into a joint program with either South Korea or and Russia is part of a policy to boost the domestic private sector defense industry, and that the and MoD would like to see partnerships for weapons programs with overseas companies.

After coming to power, the Narendra Modi government of Prime Minister Narendra Modi canceled two global tenders for light utility helicopter purchases the purchase of Light Utility Helicopters (LUH) and approached the domestic companies to participate in the procurement of unspecified numbers of helicopters, LUH, either alone or in partnership with an overseas company.

India needs requires 440 LUHs to replace its the aging Cheetah (cq) and Chetak (cq) helicopters used for reconnaissance, and logistics in the high altitude battlefields in the Himalayas.

After the summit talks with Putin, Indian Prime Minister Narendra Modi said in a statement: to the media after the summit said, "I am pleased that Russia has offered to fully manufacture in India one of its most advanced helicopters. It includes the possibility of exports from India. It can be used for both military and civilian use. We will follow up on this quickly."

South Korea has also offered India full tech transfer of technology of the Surion helicopter, (LUH) with a proposal to develop jointly a naval variant of the Surion helicopter the MoD source said. A diplomat from of the South Korean Embassy in New Delhi confirmed that a proposal was has been made to India in December, early this month for the development and production of variants of Surion helicopter, but gave no details.

In August 2014, MoD canceled the 2012 tender for the purchase of 56 naval utility helicopters, in which Airbus Helicopters and AgustaWestland were in the race.

In July, MoD canceled the 2008 global tender for the purchase of 197 light utility helicopters (LUH) worth $1 billion, in which Eurocopter's (now Airbus Helicopters') AS550 (cq) helicopter was in competition with Russia's Ka-226T built by Kamov (cq).

India's helicopter has a total requirement of 440 helicopters which is expected to grow to 600. In addition, the MoD also plans to procure 90 multirole helicopters worth $2.5 billion only through the "Buy and Make (India)" route.

"Except for state-owned Hindustan Aeronautics Limited [HAL], no private-sector defense major has ever produced a military helicopter," Mehta said. "But in the future, tie-ups are expected with overseas defense companies to tap the emerging helicopter market." says Mehta.

US-based Sikorsky of U.S. and Tata Group of Industries already have an agreement, tie up and in October, Airbus Helicopters also announced a tie-up with the Tatas to jointly produce Avro transport aircraft.