Private Industry Demand Increased Government Commitment for Avro HS748M Replacement

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[nonmember] In an effort to expand its domestic supplier base, India’s Ministry of Defense is planning to open the tender for medium transport aircraft beyond the government owned Hindustan Aeronautics Ltd (HAL). The Defense Acquisition Council (DAC) last week opened the US$2.6 billion (12,000 crore) global tender to foreign vendors that can partner with a domestic private company to manufacture 56 transport aircraft for the Indian Air Force, replacing the obsolete fleet of Avro planes.[/nonmember]

In an effort to expand its domestic supplier base, India’s Ministry of Defense is planning to open the tender for medium transport aircraft beyond the government owned Hindustan Aeronautics Ltd (HAL). The Defense Acquisition Council (DAC) last week opened the US$2.6 billion (12,000 crore) global tender to foreign vendors that can partner with a domestic private company to manufacture 56 transport aircraft for the Indian Air Force, replacing the obsolete fleet of Avro planes.

According to local defense sources the first 16 aircraft will be delivered four years after the contract award, to be manufactured abroad by the foreign vendor while they partner with a local private or public sector firm to transfer production to India. The next 16 aircraft will have to have 30 per cent indigenous component, while the remaining 24 planes will have 60 per cent locally-procured and produced items, DAC determined.

HAL produced 89 HS748M Avro aircraft since 1964. Part of the fleet has already been replaced with Russian Antonov An-12 and An-32, which itself is due for replacement by the jointly developed Russia-Indian Medium Transport Aircraft (MTA). The Ilyushin IL-214 MTA is being developed under a collaborative $771 million program between United Aircraft Corporation (UAC) of Russia and HAL in India. The Indian Air Force plans to buy 45 these 20-15 ton class tactical transport planes.

The logistical transport mission would be carried by a smaller plane, designed to replace the remaining fleet of 60 year old Avro HS748M. While Russian Ilyushin or Ukrainian Antonov are theoretically considered, most likely contenders are European EADS Casa C-295 and Italian Alenia C-27J Spartan. The aircraft should be able to transport 6-8 tons of cargo over 2,500 – 2,700 km range, at a cruising speed of cruise speed of 800 km/h. The aircraft should have a rear ramp and short-field capability, which both C-295 and C-29J provide.

These aircraft are transporting personnel and cargo between airbases. Indian defense officials said the 56-aircraft project would help in developing a domestic aerospace industry and capability to undertake such projects, opening new offset opportunities for foreign contractors seeking to expand business with India.

The decision has opened doors for private sector players like Tata, Mahindra and Reliance, which can form a consortium with the foreign vendors. Mahindra has already embarked on an ambitious plan to produce the Airvan 18 and Nomad N24 airplanes, versions currently designed to carry loads below the 7-8 ton goal foreseen for the Avro replacement.

While the contract opens new opportunities for the private sector, leading companies are not too enthusiast to come abroad, without a government commitment to quadruple their orders.