These latest decisions by the NDA government clearly reflects their appreciation of the need to modernise the armed forces quickly while also pushing its agenda of “Made in India”.

On August 29, 2014, the government cancelled for the second time, the Rs. 6000 crore tender for 197 light utility helicopters (LUH) for the Indian Army and the Indian Air Force (IAF) to replace the vintage fleet of Cheetah and Chetak helicopters whose induction had begun in the early 1970s. The tender was on hold for the last two years following investigation into allegations of wrongdoing.

The case for the LUH was initiated by Army Headquarters in 2001 but the tender was floated for the first time only in 2004. In December 2007, after intensive effort during which the contenders were put through an elaborate technical evaluation followed by flight evaluation in different weather conditions and operating environment, the Eurocopter AS550 Fennec was selected as the platform of choice. However, the Indian Army was shocked to learn that on the day the contract was to be signed with the the Eurocopter (now Airbus Helicopters), the tender was cancelled rather abruptly. This decision was taken by the Ministry of Defence (MOD) due to allegations of irregularities in the process of selection as well as the involvement of middlemen which was and is not permitted under the Defence Procurement Procedure. Reports in the media indicated that one of the contenders who was eliminated from the race, had complained of lack of fairness in the selection process. Whatever the case, years of effort by Army Headquarters in processing the case as also the time, effort and resources expended by the contending OEMs, proved to be in vain!

The tender was floated for the second time in July 2008 by which time the total requirement of helicopters in this class including that of the IAF, had gone up to 384. However, the numbers to be procured from a foreign vendor was retained at 197 (133 for the Indian Army and 64 for the IAF) and the Indian aerospace major the Hindustan Aeronautics Ltd (HAL) was tasked to indigenously develop a platform of equivalent payload (three tonnes) capability and performance. Tentatively, the numbers indicated to HAL for the new machine was pegged at 187. In the second round of tendering, there was only machine, the Russian Kamov Ka 226T competing against the Eurocopter AS550 C3 Fennec. Once again the MOD ordered investigations into allegations of wrong-doing in the processing of the tender. Based on the results of the investigation as also under the ominous shadow of the scam tainted AgustaWestland deal, the second tender for the 197 LUH was also cancelled.

But while the NDA government has now abandoned the idea of procuring the LUH from abroad a decade after the tender was floated for the first time, the responsibility for this fiasco must lie squarely with the UPA government for having dithered for a decade and having complicated the matter to a point of no redemption. As the case had practically reached a dead-end, the present government had no other option. However, they ought to be given credit for clearing a number of other long pending contracts for the three services. These include tenders for 22 Apache helicopters as well as for 15 Chinook heavy-lift helicopters, both from Boeing, 16 multi-role helicopters for the Indian Navy and for 118 Arjun MkII Tanks for the Indian Army apart from a number other smaller projects all totalling to Rs. 20,000 crore. While the cancellation of the LUH deal has certainly created serious difficulties for the Indian Army and the IAF, it may prove to be bonanza for the Indian aerospace industry that can look forward to a business worth Rs. 40,000 crore to build at least 400 machines initially.

These latest decisions by the NDA government clearly reflects their appreciation of the need to modernise the armed forces quickly while also pushing its agenda of “Made in India”. The IAF can now look forward with renewed confidence to the early finalisation of the contract for the 126 Rafale medium multi-role combat aircraft.