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Tuesday, July 24, 2012
By : Defence News

The Ministry of Defence gave its final nod to purchase 56 transport planes worth $2.4 billion to augment the IAF's cargo fleet, apart from tweaking its defence procurement offsets policy and creating a new agency to execute the same.
  • The Ministry of Defence gave its final nod to purchase 56 transport planes worth $2.4 billion to augment the IAF's cargo fleet, apart from tweaking its defence procurement offsets policy and creating a new agency to execute the same.

    Defence Minister A.K. Antony on Monday cleared the proposal to buy the cargo planes for the IAF.

    The 56 new transport planes will replace the IAF's ageing Avro planes fleet and the defence ministry will issue a global tender for procuring the same. The first 16 planes under the deal will be directly procured from the vendor.

    The winning company will have to tie-up with an Indian private or a public sector firm to acquire components for manufacturing the rest 40 planes.

    As per the proposal approved by the DAC, 16 of these aircraft will be purchased in fly-away condition from the foreign vendor, the next 16 will have 30% indigenous components and the last 24 will be 60% indigenized. The first of the 56 aircraft set to replace the Avro transport aircraft in the IAF will be delivered four years after the signing of the contract.

    Among the new offsets policy guidelines approved included transfer of technology and critical technologies as eligible defence offsets, a policy under which any foreign firm winning an Indian defence contract worth over $60 million will have to plough back a minimum of 30% of the deal back in Indian defence, aerospace and homeland security industries and training.

    The military aviation sector in India has till now strictly been the preserve of HAL. This is the first time the defence ministry is looking beyond the defence PSU, whose order book is overflowing with projects ranging from production of Sukhoi-30MKIs and upgrades of MiG-29s and Mirage-2000s as well as proposed ones like the around $20 billion one for the medium multi-role combat aircraft.


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