NEW DELHI — India has broken the monopoly of state-owned military aircraft manufacturer Hindustan Aeronautics Ltd. (HAL), allowing private sector Tata Advanced Systems Ltd. (TASL) to tie up with Airbus and manufacture the C-295 transport aircraft to replace aging Avro transports in a $2 billion deal.
The historic decision by the Defense Acquisition Council (DAC) last night which also approved the purchase of 145 M777 ultra light howitzers guns from the US subsidiary of BAE Systems on a government-to-government basis.
The decision on the transport plane could help develop India's private sector aerospace infrastructure, an Air Force official said.
DAC also cleared a proposal to jointly produce Russian-made Ka-226T helicopters with HAL in India. The Russian President Vladimir Putin had offered joint production of the Ka- 226T, helicopters made by Kamov, of Russia during talks with Indian Prime Minister Narendra Modi in New Delhi in December.
After coming to power last year, the Indian government canceled global tenders to buy for the purchase 197 light utility helicopters (LUH) for the Indian Army and Indian Air Force, and later canceled another tender to purchase the LUH for the Navy.
The Russian Ka-226T twin-engine helicopters would replace India's the aging Cheetah and Chetak helicopters. A Defence Ministry source of Defense (MoD) said it is likely that the Russian helicopter Ka 226T will meet all future needs of the military, defence forces which has demanded more than 400 of over 400 LUHs.
Details of the joint production of the Ka-226T will be worked out separately later, an MoD official said.
The company Russian Helicopters did not respond to a request for comment on the terms of the India Ka-226T production deal, but a spokesperson for Russia's arms export agency, Rosoboronexport, said, "[Russia] is ready to render technical assistance of any form to our Indian partners in mastering production of these helicopters."
Rosoboronexport did not respond to a question about how Russia landed the deal, which has been debated on the ropes for years, but President Vladimir Putin broached the subject with Indian Prime Minister Narendra Modi during his December visit and called Modi before India's DAC Defense Acquisition Committee announced its decision. approval of the Kamov Ka-226T production deal Putin called Modi.
According to a brief statement published on the Kremlin website Wednesday, the two leaders discussed "several large joint trade and economic projects" as well as a range of other aspects of their growing strategic relationship.
DAC's decision to allow Tata-Airbus to build C-295 transport aircraft in India could is a major decision of the MoD as it would pave the way for establishment of an aerospace infrastructure in the private sector. The Indian Air Force (IAF) has been aggressively pushing for creation of an alternative to HAL in aerospace, a senior Air Force official said.
"Airbus had tied up with TASL for the Avro transport aircraft replacement tender with the hope that they [Airbus and TASL] will together draw major plans to join hands in the aero market, including joint production of a variety of helicopters," an executive of the Tata group said. ". an executive of TASL had told Defense News earlier.
Though Tata-Airbus had emerged as a single vendor in the Avro replacement deal, DAC cleared the proposal as a special case to boost the aerospace sector within the private industry, sector said an MoD official. of MoD. Single vendor tenders are generally canceled by MoD.
In 2013 a tender was floated only for domestic private sector companies to manufacture transport aircraft to replace the Avro transport fleet. The government decided in July 2014 that the tender should be reserved for domestic private sector companies as production partners and state-owned HAL was excluded from the program.
Only Airbus Defense and Space (ADS) of Spain with its offer of the C-295, in conjunction tie up with domestic private sector defense TASL, had filed a its bid. for the program.
The proposals cleared by DAC will now have to be approved cleared by the Cabinet Committee on Security (CCS) headed by the prime minister.