Indian New Defence Acquisitions Insights

New defence acquisitions insights

The government is likely to pave the way for six new BrahMos supersonic cruise missile systems for the Indian Navy worth about Rs 2,700 crore besides taking a call on Army's proposal for acquiring BAE's M777 Ultra-Light Howitzers, in the Defence Acquisition Council meeting on Wednesday.

Defence sources said the issue of the US $2.5 billion Avro replacement programme is also likely to be discussed.

Besides the Avro, the big ticket proposal for Wednesday is six new BrahMos systems with 89 supersonic missiles. The cost of the project will be around Rs 2,700 crore, sources told PTI.

Another important proposal to be discussed is BAE Systems' offer to build a howitzer factory in India to close a deal valued at nearly US $800 million.

It was first considered by the UPA regime but underwent a quiet burial due to differences over price and offset commitments.

However, keen to sell its guns to India, the American company has offered to be part of the 'Make in India' initiative, sources said, adding that the firm is ready to set up an assembly line here with a local partner to make the guns domestically.

The sources said it would be a government to government deal between US and India.

The Army, which is in desperate need of new artillery guns, is keen that Foreign Military Sales (FMS) option be revived for BAE's guns and that a fresh Letter of Offer and Acceptance be floated to US.

Another key proposal that would come under discussion is the lone bid of Airbus-TATA consortium to replace IAF's ageing fleet of 56 Avro aircraft with C-295 transport carriers.

A final decision was anticipated in November last year but Parrikar had then sought more information about the necessity of the aircraft and the bidding process. Under the current defence procurement policy, single-vendor situation is not entertained unless cleared by the DAC.