With the Modi government in office, defence deals on the back burner are likely to get a new push. Military hardware procurement worth $100 billion are pending for over a decade. Deals such as the $20-billion 126 MMRCA buy from France will be among the first few to be inked by defence minister Arun Jaitley.
The MMRCA deal with French firm Dassault Aviation for 126 Rafale planes, which has been in the works for close to two years now, is expected to be be inked in the next few months.
Defence ministry sources told FE, “The MoD is expected to prioritise their modernisation and procurement plans in the first Budget of NDA government. Deals such as 22 Chinook attack helicopters for Rs 7,000 crore and 15 Apache heavy lift helicopters for Rs 5,000 crore, both from US firm Boeing, 145 M777 ultra light howitzers for Rs 3,500 crore from US-based BAE Systems and six Airbus MRTT midair refuellers worth Rs 10,000 crore are all waiting to be signed for over a year now.”
The M777 ultra light howitzers contract, which was routed through Washington’s government-to-government foreign military sales (FMS) programme, should have been signed years ago. Instead, the MoD missed deadlines that BAE had imposed because the company could not afford to keep the gun’s UK production line open while it waited for Delhi to sign on the dotted line.
The Army’s ambitious Field Artillery Rationalisation was established in 1999 and envisaged a $5-7 billion procurement of 3,000-3,200 assorted caliber howitzers by 2027. None of these acquisitions have been completed.
In FY14, the defence ministry has signed only one major deal for six C-130J planes worth Rs 4,000 crore from US firm Lockheed Martin, that too in late December 2013.
IAF chief Arup Raha met Prime Minister Narendra Modi on Monday and and is believed to have briefed him and Jaitley on the operational preparedness of the force.