French Airbus and Tata Sons of India have bid together for a multi-billion-dollar contract which is lined up to replace the Indian Air Force’s ageing fleet of Avro – the cargo aircraft. New Delhi looks to boost the role of the local private sector in modernizing its armed forces. Estimated by analysts, this bid is going to be worth at least $2 billion. If successful, Airbus’s Defence and Space unit and Tata’s Advanced Systems would replace the 56 Avro jets with Airbus’s C295 transport planes. Airbus would supply the first 16 planes in “fly away” condition from its own assembly line, while the subsequent 40 would be manufactured and assembled by Tata Advanced Systems based in India.
The new government led by Prime Minister Narendra Modi has raised the foreign investment limit in defence since coming to power in May 2014. It is moving to clear a backlog of military equipment orders and close the gap on strategic rival China.
Further, it has been said that the government will prioritize companies which have pledged to manufacture within India.
Indian giant companies like: Tata, Larsen & Toubro and Mahindra Group are spending billions of dollars to build arms and they look to win a chunk of the $250 billion that analysts estimate India will spend on defence kit over the next decade.
On the other hand, India is also trying to replace much of its outdated fighter jets. The biggest ever contract is of $15 billion deal with France’s Dassault Aviation to buy 126 4.5 generation Rafale fighter jets, which still needs to be finalized.
Source: Times of India