The IAF will have lucrative opportunities for the global aerospace industry in the coming decades

In February last year, Defence Minister A.K. Antony in a written reply to a question in the Rajya Sabha had said that by the end of the 13th Five Year Plan period (2017-22), the combat fleet of the Indian Air Force (IAF) would increase to 42 squadrons from the current level of 32 squadrons. The figure stated by the Minister of Defence is higher than the government sanctioned strength of 39.5 squadrons. The increase therefore is a mere 6 per cent. However, on the occasion of the anniversary of the IAF two years ago, the then Chief of the Air Staff (CAS), Air Chief Marshal Fali Homi Major was more specific when he disclosed that “the IAF was in the process of an unprecedented transformation that would entail an investment of around $100 billion (`4,60,000 crore) for aircraft, equipment and infrastructure over the next one decade or so”. It goes without saying that the major share of the pie would go to the global aerospace industry.

The mandatory levels of “offset” prescribed for defence equipment related contract in the Defence Procurement Procedure (DPP) 2008 as amended from time to time ranges from 30 to 50 per cent. It will therefore devolve upon the domestic aerospace industry to cope with new business worth a minimum of $30 billion (`1,38,000 crore). The prospects in the wake of the staggering levels of investment intended to be made by India for the IAF over the next 10-20 years, would certainly be mouth-watering for both the global as well as the domestic aerospace industry.

Aircraft Acquisition Programmes

Even prior to the earth shattering disclosure by the CAS in October 2008, the IAF had already finalised a deal worth $1.1 billion (`5,060 crore) with US aerospace major Lockheed Martin for procurement of six C-130J Super Hercules military transport aircraft for use by the Indian Special Forces. The first of the six aircraft contracted is expected to be delivered to the IAF in 2011. In another deal with Boeing which was to the tune of $1 billion (`4,600 crore), the IAF has received three customised Boeing business jets for VVIP travel. These have been operational with Delhi (Palam)-based Air Headquarters Communication Squadron since April last year when they were formally inducted by the President of India. In March this year, the IAF signed a $750 million (`3,450 crore) contract with AgustaWestland, a Finmeccanica company for 12 AW101 helicopters once again for VVIP travel.

After conducting extensive trials in India last year, the IAF selected the Boeing C-17 Globemaster III heavy lift military transport aircraft to replace the ageing fleet of IL-76 aircraft and as the mainstay meet its requirements of strategic mobility and reach. The IAF is currently engaged in the process of finalising the $5.8 billion (`26,680 crore) deal for 10 of the most advanced version of the aircraft through a government-to-government transaction also referred to as foreign military sales (FMS) programme of the US Government. The agreement is likely to be signed during the US President Barack Obama’s visit to India in November this year. With this acquisition, India would have the largest C-17 fleet outside the US. At present this privilege is with the UK that has a fleet of eight C-17 Globemaster aircraft. The IAF plans to bid for another six of these mammoth aircraft after induction of the first 10.

In the regime of rotary wing, the IAF is looking for 22 attack helicopters to replace the ageing fleets of Mi-35 for which the request for proposal (RFP) has been issued. The products available in the global market that could conform to the qualitative requirements of the tender are AgustaWestland A129, Bell AH-1Z Cobra, Boeing AH-64D Apache Longbow, Eurocopter Tiger, Kamov Ka-52 and Mil Mi-28. The IAF is also seeking 15 heavy lift helicopters to replace the Mi-26 that are of Russian origin. The RFPs for this requirement has been sent to Eurocopter, Bell Helicopter, Sikorsky Aircraft, Boeing, AgustaWestland and Kamov Design Bureau.

After the tender for the attack helicopter was floated for the second time, Boeing has entered the race with an offer of the renowned attack helicopter Apache AH 64D. In the case of the heavy lift helicopter requirement, the IAF is evaluating the Boeing Chinook CH-47F which will be acquired through the US Government’s FMS programme. Together, the two contracts would be in the region of $2 billion (`9,200 crore). The lead time for delivery of the helicopters to the IAF would normally be three years after the contract is signed. There is no transfer of technology (ToT) involved as the machines are being purchased outright and are not to be manufactured in India.

In July 2008, the Government of India cleared the purchase of 384 three-tonne weight category light utility helicopter (LUH) worth $2 billion (`9,200 crore) to replace the ageing fleet of Cheetah and Chetak that have been around for four decades. Of these, 125 machines would go to the IAF and 259 to the Indian Army. As a part of this project, the government has for the second time floated a $750 million (`3,450 crore) tender to six aerospace majors, for fast rack, off-the-shelf purchase of 197 LUH, 133 for the Indian Army and 64 for the IAF. The offset obligation in this tender has been pitched at 50 per cent. Trials are under way and the contract is likely to be finalised in the near future. The balance of 184 is to be manufactured by Hindustan Aeronautics Limited, in all likelihood with limited collaboration with a foreign partner.

But perhaps the mother of all deals is the $12 billion (`55,200 crore) tender for 126 medium multi-role combat aircraft (MMRCA) for which six of the leading global aerospace majors are in the race. These are Boeing and Lockheed Martin from the US, Saab, EADS and Dassault from Europe and RAC MiG from Russia. The tendering process has undoubtedly been slow but hopefully it should be finalised soon.