India on Friday scrapped a Rs. 6,000-crore project to import light utility helicopters (LUH) for the army and air force to replace ageing French helicopters used in high-altitude areas to support troops.
The defence acquisition council (DAC), headed by defence minister Arun Jaitley, decided the helicopters will be produced in India in a joint venture with a foreign firm. European and Russian vendors were eyeing the LUH contract.
The decision is in line with Prime Minister Narendra Modi’s intention to speed up defence indigenisation and transform the country from the world’s biggest arms importer into an export powerhouse.
India inched closer to buying 22 Apache and 15 Chinook helicopters from the US for Rs. 15,000 crore, with all pending offset issues being sorted out ahead of Modi’s visit to the US at the end of September.
In its second meeting since the new government took over, the DAC cleared military projects worth Rs. 20,000 crore, including key proposals to upgrade six submarines for Rs. 4,800 crore, procure 118 Arjun Mk II tanks for Rs. 6,600 crore and mount the tanks with 40 artillery catapults worth Rs. 820 crore. The government has also approved a Rs. 900-crore dedicated communication system for the army in the northeast.
In another key decision, the government approved the opening of commercial bids in the navy’s multi-role helicopter tender that involves Finmeccanica’s UK-based subsidiary AgustaWestland.
The contract is for equipping the Indian Navy with 16 multi-role helicopters, to be followed by another for 75 more choppers, pegged at $3 billion.
The LUH tender was scrapped for the second time in seven years.
It had been on hold for the last two years, with the CBI investigating the role of a brigadier who had allegedly sought a bribe from AgustaWestland to swing the deal in its favour.