July 21, 2015

Push to 'Make in India'! Navy to screen private and public vendors for Rs 20K-crore deal

The Indian Navy is in the process of selecting private and public vendors from the country to procure new utility helicopters at the estimated cost of over Rs 20,000 crore, reported the Economic Times.

The Navy has sent a proposal to the Ministry of Defence which specifies that it needs 110 naval utility helicopters, out of which 94 are to be made in India in partnership with a foreign partner.

Moreover, the valuation of the contract makes it the largest 'Make in India' chopper deal till date, exceeding the Army light utility chopper deal that was given to Russia's Kamov in May and will cost over Rs 5,000 crore.

According to sources, the Navy has also proposed to purchase torpedoes and depth charges for choppers and that weapon trials would be held in India and abroad.

As it was reported, 11 Indian companies, including Mahindra, Tata, L&T and Reliance, have shown interest to the proposal that was issued by the Navy earlier this year. All offered helicopters to be 'Made in India' in collaboration with a foreign firm.

Mahindra and Airbus have even announced discussions on the formation of a joint venture (JV). The companies aim to form a JV firm in the coming months for 'Make in India' chopper contracts in what is speculated to be an exclusive contract for Airbus.

While 11 Indian entities have expressed interest, there are only a handful of foreign companies with a helicopter that meets Indian requirements. These include Airbus, Bell and banned Italian entity AgustaWestland.

To make the selection more competitive, the Navy has decided that more than one Indian company can offer the same helicopter. This would mean that a foreign company could tie up with two more Indian entities. As the cutting factor is pricing, an intense competition is expected in the private sector to tie up JVs and MoUs.


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