Centre approves procurement of 56 C-295MW transport aircraft for IAF

The Cabinet Committee on Security on Wednesday cleared a long-awaited deal to purchase 56 C-295MW transport aircraft from Airbus at a cost of around Rs 21,000 crore (nearly $2 billion), clearing the decks for the Indian Air Force to replace its ageing Avro fleet.

While 16 aircraft will be delivered in flying condition from Spain within 48 months of the signing of the contract, the remaining 40 will be manufactured in India by a Tata-Airbus Consortium within ten years. All 56 aircraft would be installed with the indigenous Electronic Warfare Suite.

With the CCS nod in the pocket, the Defence Ministry will now start commercial negotiations involving the IAF, Airbus and the Tata group, hoping to close the deal at the earliest.

This is the first project of its kind in which a military aircraft will be manufactured in India by a private company, ending decades of monopoly that Hindustan Aeronautics Limited enjoyed.

For Airbus, it is the first defence contract after the 1960s, when it bagged a deal to supply Cheetah and Chetak helicopters to India. The European aircraft manufacturer was earlier shortlisted in three Indian programmes, none of which materialised.

Even the C-295MW programme received the Defence Ministry’s nod in 2016 but it did not lead to a commercial contract due to several factors including resistance from the public sector.

The opposition from the PSU was there from the very beginning when former Defence Minister A K Antony started the Avro-replacement programme involving a private company.

A transport aircraft of 5-10 tonne capacity with contemporary technology, C-295MW is much superior to the slow-moving Avro. Also, it has a rear ramp door for quick reaction and para dropping of troops and cargo.

The programme would provide a major boost to the domestic aviation industry by offering a unique opportunity for the Indian private sector to enter into the technology-intensive and highly competitive aviation industry, a defence ministry official said.

Since a large number of aircraft parts, sub-assemblies and major component assemblies are to be manufactured in India, the C-295 manufacturing programme is expected to act as a catalyst in employment generation in the aviation sector.

According to a Defence Ministry analysis, the programme can generate 600 highly skilled jobs directly, over 3,000 indirect jobs and an additional 3,000 medium skill employment opportunities with more than 42.5 lakh man-hours of work within the aerospace and defence sector of India.

Before completion of deliveries, a top-class servicing facility for C-295MW aircraft will be set up in India to act as a regional Maintenance, Repair and Overhaul (MRO) hub for various variants of C-295 aircraft operating in the region.

"Airbus welcomes the decision of the Cabinet Committee on Security on the procurement of 56 C-295 aircraft and looks forward to signing and executing the contract jointly with the Tata Group," a company spokesperson said reacting to the CCS decision.

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