MoD clears military purchase worth Rs 46,000 crore

The Defence Ministry on Saturday approved procurement worth nearly Rs 46,000 crore including the purchase of 24 multi-role helicopters for the Navy and manufacturing of 111 naval utility helicopters in India through a “Strategic Partnership” route.

The Defence Acquisition Council, headed by Defence Minister Nirmala Sitharaman, has cleared the long-pending proposal of buying the multi-role helicopters that are an integral part of the front line warships like the aircraft carriers, destroyers, frigates and corvettes, the ministry says in a press statement after the meeting. The total cost of the deal is likely to be around Rs 13,000 crore.

On the other hand, the 111 naval utility helicopters – to be acquired in a Rs 21,000 crore package – would replace the ageing Chetak chopper being flown by the Navy for decades. Last month DAC approved “executing guidelines” to manufacture these choppers in India with the involvement of a foreign vendor and a local production firm.

The SP Model envisages indigenous manufacturing of major defence platforms by an Indian company (strategic partner), who will collaborate with the foreign vendor (original equipment manufacturer) to acquire niche technologies and set up production facilities in India.

In August 2017, Indian Navy issued a Request for Information for the 111 twin-engine naval utility helicopter deal. Four companies are in contention.

The two vital procurement decisions have been taken on the eve of 2+2 meeting between India and USA on September 6 where bilateral cooperation on defence technologies would be on the agenda. In the last two decades, US companies have slowly enhanced their market share in the lucrative Indian defence market. India remains the world’s number one arms importer.

With New Delhi showing increasingly more affinity to the USA, the import from America rose by a whopping 557% between 2008-12 and 2013-17, according to a March 2017 report from Stockholm International Peace Research Institute that keeps an eye on the global arms trade.

Besides the Rs 21,000 crore deal to buy naval utility helicopters, the DAC cleared three other projects worth Rs 24,879.16 crore including the 24 multi-role helicopters, whose price tags have not been disclosed.

In addition, the defence ministry acquisition panel gave its green signal to buy 150 advanced towed artillery gun systems, designed and developed by the Defence Research and Development Organisation at a cost of Rs 3,364.78 crore.

To be manufactured by production agencies, as nominated by DRDO, these guns are likely to be the mainstay of artillery in the near future.

Moreover, procurement of 14 vertically launched short-range missile systems at cost of about Rs 8500 crore was also cleared by the DAC to augment the self-defence capability of warships against enemy missiles. Of these, 10 systems will be developed through an indigenous programme, says the MoD statement.