Without the capability to produce military aircraft and weapon systems in the country, the Indian armed forces cannot hope to sustain real operational edge over the hostile neighbours

The Rs. 3,546 crore contract awarded to AgustaWestland for the supply of 12 AW101 helicopters to the Indian Air Force (IAF) for VVIP travel appears to be doomed. The Indian Ministry of Defence (MoD) has issued a final “show cause” notice to AgustaWestland for cancellation of the order on the basis of purported violation of integrity pact enshrined in the terms of the contract. Meanwhile, three of the 12 machines are already flying with the IAF and notwithstanding the fact that nearly half the value of the contract has already been paid, in all likelihood, these three AW101 helicopters would be returned to the original equipment manufacturer. This may entail heavy loss to the Government of India and apart from the enormous waste of time, effort and resources by the original equipment manufacturer (OEM), the more serious aspect of this baulked deal is the erosion of credibility of the Indian Defence Procurement Procedure. Besides, very soon, there would be no helicopters available with the Air Headquarters Communication Squadron to fly VVIPs. Also, there is no certainty as to the time frame in which a suitable platform would be acquired for VVIP travel.

The problem with the deal pertaining to the AW101 contract began with the arrest last year of Giuseppe Orsi Chairman and CEO of Finmeccanica following investigations into allegations of payment of kickbacks to the tune of Euros 50 million to facilitate the deal. Orsi was then heading the AgustaWestland division. The recipient in India of the alleged kickbacks is yet to be established and probably never will be. It is understood that the probe ordered by the Italian authorities was a fall out of internal political turmoil in the face of national elections that were imminent.

Earlier on in 2007, the tender for 197 light utility helicopters (LUH) to replace the ageing fleet of Cheetah and Chetak helicopters of the Indian Army floated in 2003, had reached a stage where the Eurocopter AS-550 Fennec had emerged as the winner. However, following investigation into allegations by Bell Helicopter about deviation from procedure during the process of evaluation to favour Eurocopter, the tender was cancelled on the day the contract was to be awarded. Years of effort and huge investments by the OEM had once again gone waste.

The tender for LUH was refloated in 2008 once again for 197 helicopters as against an enhanced total requirement of 384 machines for the Indian Army and the IAF. However, the size of the order for procurement from abroad was retained at 197 to avoid the need for a revised sanction of the Ministry of Defence, a process that would have entailed further delay. On parallel track, the Indian aerospace major Hindustan Aeronautics Limited (HAL) was tasked to produce an equivalent platform and provide the balance of 187 for the two services. This machine is expected to fly by the end of the current year and production is expected to begin in 2015. But these time frames may change.

In the second round of the tendering process, Eurocopter once again emerged as the preferred vendor. However, the Italian authorities probing the AW101 deal, chanced upon evidence of a senior functionary of the Indian Army demanding a hefty commission of $5 million to swing the LUH deal in favour of Finmeccanica. With the deal heading for cancellation, the decade-long effort of the Indian Army to replace its ageing and obsolete fleet of the Cheetah and Chetak helicopters, have repeatedly been frustrated. Induction of the new fleet of LUH has acquired urgency as without it the Indian forces deployed in the high, inaccessible and inhospitable mountainous terrain of Ladakh or the Northeast, are left without logistic support seriously eroding their operational potential and even threatening their very survival.

For a nation with a population of over 1.2 billion, an emerging regional power aspiring for superpower status, gifted with abundant human resource and possessing a sizeable aerospace industry, it is not only anomalous but somewhat distressing that the Indian armed forces continue to be dependent on foreign sources for even basic military hardware.

The supreme lesson from the unmitigated disasters by way of the two failed major contracts for acquisition of military helicopters from abroad is that the nation ought to take the issue of developing indigenous capability in defence production much more seriously than has been done so far. Without the capability to produce military aircraft and weapon systems in the country, the Indian armed forces cannot hope to sustain real operational edge over the hostile neighbours.