The acquisition process for Indian Air Force Medium Multi-Role Combat Aircraft (MMRCA) reached the final stage on Friday after the Ministry of Defence approved the offsets evaluation reports of the two competitors – French Dasault's Rafale and European consortium Eurofighter.
With the Defence Acquisition Council chaired by Defence Minister A.K. Antony clearing the offsets proposals worth over Rs. 20,000 crore, the stage is set for the opening of the commercial bids submitted by the two manufacturers.
Ministry officials said the sealed bids for the aircraft submitted would be opened in a few days — likely toward the end of the month — in the presence of representatives of the two manufacturers.
Clearance
Once the lowest bidder is identified, the process to negotiate the cost would set in leading to eventual clearance by the Cabinet Committee on Security.
Earlier this year, Mr. Antony had said the contract should be signed before the end of the current financial year.
While the Defence Procurement Policy makes it mandatory for all purchases of Rs. 300 crore to have at least 30 per cent offset, in the case of the MMRCA it is 50 per cent.
Offset clause
As per the offset clause, the eventual winner of the contract would have to source 50 per cent of the value of the contract from domestic industry. The offset evaluation report shows the tie-up the French company or the European consortium could have with Indian partners could be in the form of joint ventures. For instance, the offsets agreements in the case of MMRCA could well run into over 100 companies each by the competitors.
The IAF plans to acquire 126 aircraft, 18 of them in ready-to-fly condition, while the rest would be under licence production in India. The delivery schedule envisages the arrival of the first aircraft 36 months after the signing of the contract. Overall the entire contract could take up to 12 years for delivery of all the aircraft. The possibility of the numbers going up was not be ruled out by the IAF.
In April this year, the Ministry shortlisted Rafale and Eurofighter from a field of six eliminating American Boeing (F/A-18), Lockheed Martin (F16 Super Viper), Russian MiG35 and Sweden's SAAB (Gripen).
