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India seals $3bn deal with Airbus for 56 military transports

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india-seals-$3bn-deal-with-airbus-for-56-military-transports

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India has signed a $3 billion deal to buy 56 C295 twin turboprop transport planes from European aircraft maker Airbus.   © Getty Images

KIRAN SHARMA, Nikkei staff writer | India

NEW DELHI — The Indian government on Friday signed a deal worth about $3 billion with Europe’s Airbus for 56 C295 transport aircraft to replace the Indian Air Force’s aging fleet of Avro transport planes.

Under the agreement signed between India’s Ministry of Defense and Airbus Defense and Space, Airbus will deliver the first 16 aircraft in “flyaway” condition from its final assembly line in Seville, Spain, over four years after the contract takes effect. The C295s will be handed over in transport configuration and equipped with an Indigenous electronic warfare suite.

The remaining 40 planes will be built by Tata Advanced Systems Ltd. in India as part of an industrial partnership between the two companies, Airbus said in a statement. TASL is a wholly owned subsidiary of Tata Sons, the holding company of the Tata Group, India’s largest conglomerate.

All deliveries will be completed within 10 years of signing of the contract, the Indian Defense Ministry said in a separate statement.

“The induction of [the] C-295MW will be a significant step towards modernization of the transport fleet of the Indian Air Force,” it said, adding the plane has a 5 ton to 10 ton capacity and can operate from semifinished airstrips and is equipped with a rear ramp door for quick unloading and para dropping of troops and cargo.

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“The aircraft will give a major boost to [the] tactical airlift capability of the IAF, especially in the northern and northeastern sector, and [the] Andaman and Nicobar Islands,” it added.

The project will also benefit local manufacturing and move forward the Indian government’s effort to be more self-reliant.

After completion of the deliveries, the ministry said, planes built subsequently in India may be exported to countries approved by the government.

“This contract will support the further development of India’s aerospace ecosystem, bringing investment and 15,000 skilled direct jobs and 10,000 indirect positions over the coming 10 years,” said Michael Schoellhorn, chief executive of Airbus Defense and Space.

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Sukaran Singh, managing director and chief executive of TASL, called the deal “a moment of pride for Tatas and a milestone” for the Indian military manufacturing ecosystem. “For the first time, an Indian private company will be wholly manufacturing an aircraft in India.” Ratan Tata, chairman emeritus of Tata group, said on Twitter that the move “will create a domestic supply chain capability to international standards, which has never been undertaken before.”

According to Airbus, the C295 can be used for tactical transport of up to 71 troops or 50 paratroopers, and for logistics operations to locations that are inaccessible to heavier aircraft. The plane can perform special missions, as well as disaster response and maritime patrols.

India’s Cabinet Committee on Security, headed by Prime Minister Narendra Modi, cleared the purchase of the twin-turboprop transport aircraft earlier this month. Indian state media reported that the deal was worth $2.5 billion to $3 billion and the first in which a military aircraft will be built in India by a private company.

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