India on August 29 approved industrial offset proposals to acquire 22 Boeing AH-64E Apache attack helicopters and 15 CH-47F Chinook heavy lift helicopters for the Indian Air Force, a transaction valued at $2.5 billion.
The country’s defense acquisition process mandates that contracts in excess of $50 million require 30-percent offsets. Last year, Boeing signed a memorandum of understanding with Dynamatic Technologies of Bangalore to manufacture aft pylon and cargo ramp assemblies for the Chinook in anticipation of the larger agreement.
The Indian government has declared manufacturing and export as priorities. The allowable limit for foreign direct investment in defense has been increased to 49 percent from 26 percent. The caveat that the single largest shareholder be an Indian company has been eliminated, and foreign entities can hold majority stakes. The government believes the revised policy will attract more investment.
The same week as the Boeing transaction, India and Japan directed a Joint Working Group to accelerate progress on a plan for the sale of around six ShinMaywa US-2 amphibians. The Indian government issued a request for information for nine of the amphibious search-and-rescue aircraft in 2012. The US-2’s Rolls-Royce AE2100J turboprops are the same as those powering the Lockheed Martin C-130J transports the Indian Air Force flies.
The government has officially scrapped a delayed request for proposals (RFP) for 197 reconnaissance and surveillance helicopters for the Indian Army and Air Force. It plans to issue a new request for proposal emphasizing “buy and make Indian” proposals. It is expected that Indian companies in partnership with foreign manufacturers willing to transfer technology to India will bid.
Government-owned Hindustan Aeronautics (HAL), which is in the process of fulfilling an order for 187 light utility helicopters, will likely to be a contender. Not having developed an engine yet, HAL will need to import the engines. Since the helicopters are to replace the aging Cheetah and Chetak fleet, “they were needed yesterday and speed in procurement is of the essence. HAL’s track record for deadlines is not exemplary,” an industry official said. However, HAL’s helicopter division is its strongest unit, and “there is reason to believe that HAL, if awarded the contract, will deliver,” a defense ministry official told AIN.