The Hindu : Front Page : Decks cleared for mega IAF defence deal

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Saturday, Jun 30, 2007
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Decks cleared for mega IAF defence deal

Sandeep Dikshit

NEW DELHI: The decks were cleared for the largest Indian defence deal in recent times, for purchasing 126 fighter aircraft to make up for the depletion in the IAF force levels caused by retirement of older generation aircraft.

The Defence Acquisition Council, headed by Defence Minister A.K. Antony, on Friday approved the specifications sought from the six foreign competitors for the deal estimated at Rs.42,000 crore. Most of the details were finalised at a two-day marathon meeting earlier this week.

Defence Ministry sources said if the selection process went smoothly, the first fighter would be inducted in the Indian Air Force after 3-5 years. The fighters are expected to remain in service for 40 years. “During its meeting here, the DAC debated various specifications related to the initial purchase, transfer of technology, licensed production and lifetime maintenance support for the aircraft and gave the final go-ahead for the project,” said Ministry spokesperson Sitanshu Kar.

To give an opportunity to the aviation industry to grow to global scales, the off-set obligation was hiked from the usual 30 to 50 per cent of the value of the contract. The foreign supplier would have to tie up with Indian companies or subcontract work to them to the tune of about Rs.21,000 crore.

The first lot of 18 aircraft would be purchased off the shelf and the remaining 108 would have to be manufactured in India under transfer of technology. The public sector Hindustan Aeronautics Limited would get a big slice of the pie from the off-set obligation.

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