The Defence Ministry has cleared projects worth Rs. 21,000 crore, including replacement of 56 Avro transport planes, demonstrating the government’s intent to fast track military acquisitions with an eye on promoting private sector investment in the Defence.
The Indian Air Force (IAF) and the Navy, along with the Coast Guard, are the main beneficiaries of the three-hour meeting of the Defence Acquisition Council (DAC) headed by Defence Minister Arun Jaitley.
“There are several projects in the pipeline and we have tried to expedite many of them today. Replacement of Avro jet will be a significant project in which the Indian private sector will play a critical role,” Mr. Jaitley said at the end of the session.
Inducted in the 1960s, the Avro transporters need replacement because of their growing obsolescence and rising maintenance costs.
Defence sources told The Hindu , that the DAC on Saturday has approved an earlier proposal for this pioneering project, which had been referred to the Law Ministry, because it had excluded the involvement of the public sector Hindustan Aeronautics Limited (HAL). After due deliberations, the Ministry has cleared the proposal in its original form.
Consequently, 16 aircraft, in a fly-away condition would be exported by a foreign vendor, who will select an Indian partner in the private sector for the manufacture of the remaining 40 planes. “The approval opens the gates for the growth of an Indian aerospace industry in the private sector, which would be ready to participate in more complex programmes in the future,” said Group Captain (retd.) Vinay Kaushal, Institute of Defence Studies and Analysis (IDSA).
Analysts say that Saturday’s decision is in line with the sharpening focus of the government on the development of a domestically driven “military industrial complex.” As the Avro-replacement project tapers down, domestic content would be raised to 60 per cent from an initial 30 per cent. Observers say that the contribution of the programme towards establishing a first rate aviation manufacturing infrastructure, could open the possibility of exports of this plane, and spinoff benefits for related projects in the future.
The DAC also signaled signalled its intent to strengthen the naval component of the armed forces by approving a Rs. 9,000 crore scheme for the manufacture of five support ships. Besides, the Coast Guard would benefit from a Rs. 2,360 crore largesse that will be funnelled for the induction of 32 Advanced Light Helicopters, along with five high speed patrol vessels and an equal number of offshore patrol vessels.
