NEW DELHI: Taking cue from Prime Minister Narendra Modi’s Independence Day “Make in India” call, the Defence Acquisition Council (DAC) headed by Defence Minister Arun Jaitley on Friday scrapped the global tender for Rs 6,000-crore Light Utility Helicopters(LUH). The decision is aimed at giving an opportunity to Indian private sector to collaborate with the foreign firms and produce the choppers within the country.
The DAC also cleared defence purchases worth Rs 20,000 crore, including the mid-life upgrade of the aging fleet of submarines for Rs 4,800 crore and procurement of 118 Arjun Mk II tanks for Rs 6,600 crore.
Sources said the DAC decided that Indian industry will be given an opportunity to produce around 400 LUH helicopters for the use of three Services to move troops and equipment to high altitude locations like Siachen. The helicopters are meant to replace the ageing Cheetah and Chetak fleet.
The move is also in line with the NDA Government’s decision to open up the defence sector by allowing 49 per cent Foreign Direct Investment. “The acquisition will now be placed in ‘buy and make India’ category. It is likely to generate business worth Rs 40,000 crore to the Indian industry,” sources said, adding that the DAC-approved proposals will now be placed before the Cabinet Committee on Security (CCS) after approval from the Ministry of Finance .
The MoD’s proposal to procure 197 LUH helicopters was embroiled in controversy after allegation of wrongdoings in the trial process. The proposal has been hanging fire for the last 11 years and tenders were cancelled at least twice in the past. In a major push to clear the logjam in big ticket defence purchases,the DAC approved the purchase of 22 Apache attack helicopters and 15 Chinook heavy lift helicopters for the IAF from the US.
These two deals combined together are expected to cost $2.5 billion and will become the first major defence deals of the NDA Government.
The DAC also cleared a proposal to procure 16 multi-role helicopters for the Navy. The deal was hit by the earlier decision of the MoD to blacklist Finmeccanica Group. But the bid will now be open as the government gave a breather allowing the Italian company to participate in the existing contracts. Finmeccanica’s subsidiary NH Industries is competing with Sikorsky.
The DAC also gave a major push to Navy’s submarine refit programme by approving the proposal worth Rs 4,800 crore for four German and two Russian submarines.