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| Arun Jaitley speaks during the commissioning of INS Kamorta in Visakhapatnam last Saturday. (PTI) |
New Delhi, Aug. 29: Defence and finance minister Arun Jaitley today opened up a Rs 40,000-crore helicopter market, scrapped a scam-tainted programme for army choppers and sanctioned military acquisitions worth Rs 20,000 crore in super fast-track clearances.
Most of the programmes were pending for seven years or more of the UPA regime. Jaitley is focusing on establishing a rotorcraft industry. India does not yet have the know-how to make helicopter engines.
In cancelling a plan to procure 197 light-utility helicopters — to replace the versatile Cheetahs and Chetaks — Jaitley also signalled that the armed forces would buy about 400 choppers of the class.
The contract for the 197 helicopters that can fly to heights in the Siachen glacier and service naval warships had been put on the backburner twice earlier because of allegations of corruption. The latest involved charges that a brigadier had tweaked rules to favour a vendor.
The Russian Kamov 226T and European consortium Eurocopter’s Fennec 550 C3 were in contention for the contract. Jaitley has now ruled that the programme will be “buy and make Indian” under the defence procurement policy, meaning the army will buy the helicopters from an Indian company, public or private.
The Indian company will necessarily have a collaboration with a foreign firm because India does not have the know-how to make helicopter engines. As finance minister, Jaitley had raised the cap on foreign direct investment (FDI) in the defence sector from 26 per cent to 49 per cent in his budget last month.
The class of light-utility helicopters (LUHs) is used by all three armed forces as well as by the police and paramilitary forces.
The Cheetahs and Chetaks that the new helicopters will replace are of 1960s’ vintage. The defence ministry estimates that while the immediate programme is to buy 197 choppers for the army alone, the demand would cross 400 for the armed forces.
The ministry hopes this projection will make the programme commercially viable for Indian private companies that have been reluctant to get into defence manufacturing because of limited orders. It is also in line with Prime Minister Narendra Modi’s “come, make in India, come, manufacture in India” policy that he articulated in his August 15 speech from the Red Fort.
The plan to buy the 197 helicopters — on the anvil with successive governments since the year 2000 — was estimated to cost Rs 6,000 crore. Jaitley is now offering a Rs 40,000-crore market.
Jaitley pushed through the new policy at his second meeting of the Defence Acquisitions Council (DAC), which also cleared a mid-life upgrade of submarines for about Rs 4,800 crore, procurement of 118 Arjun Mk II tanks for Rs 6,600 crore and self-propelled artillery guns worth Rs 820 crore.
The DAC also approved a new communications system for the army estimated to cost Rs 900 crore, but deferred a decision on buying anti-tank guided missiles (ATGMs).
The contenders for the ATGM order are the Spike missile made in Israel and the Javelin made by Raytheon of the US. Both have offered joint ventures to make the weapon in India.
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