Govt floats Rs 42,000cr defence tender

The defence ministry today floated its biggest ever defence tender for the purchase of 126 multi-role combat aircraft (MRCA), the bill for which could well run up to Rs 42,000 crore.

The ministry officially announced that the request for proposals (RFP) for the aircraft have been sent to six aircraft manufacturing companies including, according to top sources, aviation biggies like Raffle of France, Boeing and Lockheed Martin of the United States. The RFP has been floated after an eight-year period during which time a new procurement and audit policy was announced by the government. This order could also possibly be one of the biggest in the world to bolster a depleted Indian Air Force (IAF) which has hit an all time low strength of just 32 squadrons (576 aircraft).

Under the terms of the proposal, 18 fighters would be bought off-the-shelf while the remaining 108 manufactured under technology-transfer in India. The RFP also stipulates an option of India purchasing another 64 fighters under the same terms and conditions. The defence ministry expects the first batch of 18, which would be supplied on flyaway conditions, to be inducted in IAF by 2012.

The chosen aircraft manufacturer would have to spend 50% as direct offsets on the aircraft or defence manufacturing industry in India, the announcement said. This is 20% over and above the offset policy announced in the new procurement policy which called for 30%.