India Aims To Create New Company To Build 748 Replacement
India’s Ministry of Defense has issued a request for proposal (RFP) for the procurement of 56 transport aircraft to replace the air force’s aging fleet of around 30 Avro 748Ms. In a bid to launch an indigenous private defense manufacturing capability, this is the first time an RFP states that the Indian Production Agency (IPA) will be a private company. This leaves out Hindustan Aeronautics (HAL), which has until now held a monopoly in defense programs. The last date for submission of bids is October 8.
The RFP for the five-ton and above, 50-seater transport aircraft with a rear ramp has been released to eight OEMs–Airbus Military, Alenia, Antonov, Boeing, Embraer, Lockheed Martin, Rosboronexport and Saab. Airbus Military’s C-295 and Alenia Aermacchi’s C-27J are expected to be the finalists for the contract.
Sixteen flyaway aircraft have to be delivered within two years of contract signing, followed by another 16 in semi-knocked-down kit form starting in the fifth year. Delivery of the final 24 transports that will be manufactured in India is to be completed within 10 years.
The OEMs face multiple challenges. “It’s a nightmare,” said one of them to AIN. Identifying Indian partners for investment in infrastructure with the capability for manufacture is a major requirement. “With foreign direct investment limited to 26 percent for the OEM, the Indian partner will need to have a long-term view,” said an MOD official on condition of anonymity. The IPA will need to set up the assembly line, supply manpower, jigs and fixtures, paint and testing.
The contract stipulates indigenous value addition will be built into the contract from 30 percent, rising to 60 percent to 100 percent. India is most likely to be tapped for manpower and material that includes sheet metal, tires, electronics, manufacture of landing gear, avionics and software.
While skeptics allege manufacture of 24 aircraft is too small a number to justify the investment, one OEM told AIN: “There is no limit to the potential the project holds. A five- to ten-tonne transporter with a rear ramp is ideal for civil logistics flights to tier two and three cities in India, and also for export to neighboring countries.”