With technical issues resolved, the process for the approval by the Cabinet Committee on Security (CCS) for the Airbus C-295 transport aircraft has been initiated. According to sources the Ministry of Defence has recently concluded price negotiations with Tata and Airbus for C-295 Transport Aircraft for replacing the ageing Avros transport aircraft currently in the Indian Air Force (IAF).
“The next step after the conclusion of cost negotiations is the clearance from the CCS and the process has started and once the approval is in place, the deal is expected to be inked soon,” said informed sources.
There were some technical issues related to the deal raised during the discussions and these have now been addressed to the satisfaction of the Ministry of Defence.
While there is an urgent requirement to replace 56 Avro transport aircraft of IAF, the MoD has added six aircraft for the Indian Coast Guard for their maritime operations, bringing the total cost of the deal to around $ 3 billion.
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The closure of the financial year is four months away, and the availability of funds will be the main focus before the deal is inked. There are several other programmes of the IAF which are in the pipeline including the deal for 83 Light Combat Aircraft `Tejas’ MKI1A.
Once the deal between MoD and Tata & Airbus is finalised, under the agreement, the initial 16 aircraft are expected to be manufactured by the Airbus at their own facility and the balance will be built in India under the Tata & Airbus joint venture. This will be done under Transfer of Technology by the Airbus to Tata.
The RFP for the replacement of Avros was issued to the global players in 2013, followed by approval by the DAC in 2015. Airbus and Tata were the sole bidders pitching the C-295 aircraft.
In an earlier interaction with The Financial Express newspaper, Airbus officials had said that the replacement of the Avro with the C-295 is an excellent ‘Make in India’ project. On the completion of the Indian order, the company executives are optimistic about building global orders out of the Tata facility which will have a robust base of domestic suppliers that will feed the production line.
The Airbus Group has around 50 Indian suppliers from both public and private sector who are embedded in their global chain. Suppliers including Hindustan Aeronautics Ltd., Indian Space Research Organisation (ISRO), Dynamatics, Aequs, Tata, Mahindra, HCL and Wipro, are involved in various projects and are building aerostructures, parts and systems, as well as engineering services of the commercial as well as military aircraft.