India carpet bombs a slew of multi-billion dollar defence deals

An estimated $7 Billion contract for 83 indigenous Tejas Light Combat Aircraft (LCA) Mark 1A fighters for the Indian Air Force (IAF) will be among a slew of several long-stalled multi-billion dollar defence deals which will be signed by India by the end of this year, the head of India’s Defence Acquisitions declared in New Delhi on September 5.

The list approved for signature includes the $3.15 Billion deal for 62 Airbus C295 Medium Transport Aircraft (MTA) for the IAF and Indian Coast Guard (ICG), which “should move fast in weeks”. The IAF expects HAL to deliver 16 LCA Mk 1A fighters every year. HAL’s MS Velpari announced that an elaborate ecosystem had been established for the timely manufacture of the LCA. “HAL will only be the integrator. Not one of the 5,000 components for the fighter aircraft will me machined at HAL,” he declared. “The wings will be made by L&T, front fuselage by Dynamatic Technolologies, the middle section by VEM and the rear section by Alpha Design,” Velpari said

“The pricing for 83 LCAs was finalised on September 3 in a meeting chaired by the Secretary Defence Production. Talks are now on for the pricing of the support package. Contracts for the LCAs and 15 Light Combat Helicopters (LCHs) will be signed in 3-to-4 months’ time,” Apurva Chandra, Director-General (Acquisition) in the Ministry of Defence declared at an international seminar on ‘Energising Indian Aerospace Industry: Flight Plan for the Future’.


Orders for the LCAs and LCHs will go the state-owned Hindustan Aeronautics Limited, which is controlled directly by the Ministry of Defence.

The procurement of 83 LCA Mk 1A fighters has been pending since an approval in November 2016 of the benchmarked price of 50,025 Crore ($7 Billion). The unit price is reported to have been negotiated around $40 Million.

Chandra also announced that the 5,500 Crore ($767.8 Million) contract for an estimated 6 squadrons of the indigenously-developed Akash surface-to-air missile (SAM) shall be signed “in a couple of weeks”. This was approved by the Government last week, an apparent reference to a go-ahead by the Cabinet Committee on Security headed by Prime Minister Narendra Modi. The missile will be manufactured by the public sector Bharat Dynamics Limited, the radar and electronic systems by Bharat Electronics Limited (BEL), also public sector, while the launchers will be made by the private sector L&T and Tata groups.

Defence Secretary Ajay Kumar, who is accompanying Defence Minister Rajnath Singh on a tour to East Asia, expressed his delight at the announcement of the slew of impending deals. “LCA manufacturing ecosystem of @DefProdnIndia will get a big boost with the new order,” he Tweeted.

The IAF expects HAL to deliver 16 LCA Mk 1A fighters every year. HAL’s MS Velpari announced that an elaborate ecosystem had been established for the timely manufacture of the LCA. “HAL will only be the integrator. Not one of the 5,000 components for the fighter aircraft will me machined at HAL,” he declared. “The wings will be made by L&T, front fuselage by Dynamatic Technolologies, the middle section by VEM and the rear section by Alpha Design,” Velpari said later at the same seminar, while claiming that HAL was capable of delivering between 16 to 20 LCAs annually.

The Defence Secretary also publicly applauded the go-ahead for the Akash missile contract. “Big boost to @DefProdnIndia as the indigenous missile production involves Defence PSUs and no. of Indian MSMEs,” he Tweeted.

Later, speaking at the same event, the IAF’s Assistant Chief for Projects Air Vice Marshal J Chelapati said the contract for the 62 C295 aircraft “should move in weeks”. Price negotiations were concluded earlier this year with Tata Advance Systems Limited (TASL), which will deliver the C295 through a joint venture with Airbus

The DG Defence Acquisitions also announced that the tender for the 21,738 Crore ($3 Billion) for supplying 111 Naval Utility Helicopters (NUH) under the ambitious Strategic Partner Model will be issued by the end of 2019.

“(Contracts for) the (200) Ka-226 Light Utility Helicopters for an estimated $3 Billion and the Avro replacement (Airbus C295 Medium Transport Aircraft) are also under serious consideration,” Chandra said.

Later, speaking at the same event, the IAF’s Assistant Chief for Projects Air Vice Marshal J Chelapati said the contract for the 62 C295 aircraft “should move in weeks”. Price negotiations were concluded earlier this year with Tata Advance Systems Limited (TASL), which will deliver the C295 through a joint venture with Airbus. Sixteen of these aircraft will be directly imported while 46 will be license produced at a facility set up by the TASL-Airbus JV near Bengaluru.

Air Vice Marshal Chelapati also declared that the contract for the second phase of the Modernisation of Air Field Infrastructure (MAFI 2) running into “several thousand Crore Rupees” will be signed “in the next few weeks”.

 SP Guide Publications