India floats biggest defence tender

126 multi-role combat aircraft at a cost of Rs 42,000 cr.

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

The ministry said the Request for Proposals (RFP) for the aircraft had been sent to six companies: Russia's RAC MiG (MiG 35), Swedish Gripen (JAS-39), Rafale (France), American Lockheed Martin (F-16 Falcon), Boeing (F/A-18 Super Hornet) and makers of Eurofighter Typhoon (a consortium of British, German, Spanish and Italian firms).

The RFPs have been floated after an eight-year period during which time a new procurement and audit policy was announced by the government. This order, also possibly one of the biggest in the world, will bolster a depleted Indian Air Force, which had hit an all-time low strength of just 32 squadrons (576 aircraft).

Under the proposal, 18 fighters would be bought off the shelf and remaining 108 manufactured in India under a technology transfer pact.

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 aircraft to be inducted in the IAF by 2012.

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

A defence ministry spokesman said the transfer of technology and offset contracts would provide a great boost to the indigenous defence industry, not only to the defence public sector undertakings and Raksha Udyog Ratnas but even to private manufacturers.

He said that foreign companies would be provided great flexibility in effecting tie-up with Indian partners for this purpose.