The Ministry of Defence of India is considering melding the procurement and has pronounced to endow in 16 multirole choppers for the Indian Navy with a make in India program. Ministry of Defence has decided to promote “Make in India” movement in military sector.
On June 15th, 2017, as per the reports, Defence Ministry has scrapped a deal for Rs 6,500 crores to purchase 16 helicopters for the Indian Navy from American company “Sikorsky”. This deal was stuck for over 2 years due to the issue of price. This decision has come a couple of weeks before Prime Minister Narendra Modi’s visit to the US where he would be meeting American President, Mr. Trump.
The mystery behind supporting “Make in India movement” is to reduce imports in the defence sector. For modernization demands of Armed forces, Ministry of defence had to bargain hard as a tool to cut down the cost of military equipment and aircrafts, due to lack of budget and US firm did not agree to extend the validity of its commercial offer, so it took over 2 years for this deal to be cracked.
Since 2009, the deal was in process when the Navy proposed for buying 16 multirole helicopters forbearing deployed on its corvette. Indian Ministry of Defence lastly took this decision after the US aviation manufacturer disavowed to prolong the agreement further. As per sources, other factors like Liability clause was also responsible for delaying and holding the deal.
The time when tender bid was opened, there was a demand from US firm “Sikorsky” to raise the price of helicopters to meet inflation, but defence ministry demanded to cut the cost demanded by firm originally in its commercial bid.
Finmeccanica was the firm Navy used to deal with before, but it was chucked out of the competition due to the chopper scam allegations on it, and Navy selected “Sikorsky” for its requirement in December 2014 as it was raised as only bidder in the race after Finmeccanica.