Govt, Airbus in Rs 22,000cr deal for military aircraft; Tata to manufacture locally

New Delhi: India on Friday inked a nearly Rs 20,000 crore contract with Airbus Defence and Space to procure 56 C-295 transport aircraft to replace the Avro-748 planes of the IAF under a project that entails manufacturing of military aircraft in the country for the first time by a private company.

Under the agreement, Airbus will deliver the first 16 aircraft in 'fly-away' condition from its final assembly line in Seville, Spain. The subsequent 40 aircraft will be manufactured and assembled by Tata Advanced Systems (TASL) in India as part of an industrial partnership between the two companies.

The chairman of Tata Trusts, Ratan Tata, congratulated Airbus Defence, Tata Advanced Systems Limited and the Defence Ministry on the inking of the contract, saying it is a "great step" forward in the opening up of the aviation and avionics projects in India.

In a signed statement posted on Twitter, he said the project will create a domestic supply chain capability to international standards, which has never been undertaken before.

"The C-295 is a multi-role aircraft with several configurations to meet mission requirements. It envisages total manufacturing of the aircraft in India," he said.

"The Tata Group congratulates Airbus and the Indian Defence Ministry for this bold step in fully building this state-of-the-art multi-role aircraft in India in support of the Make-in-India thrust to bolster the country's equity framework," Tata said

The contract was signed two weeks after it was cleared by the prime minister-led Cabinet Committee on Security.

Airbus said the first 16 aircraft will be delivered over four years after the contract implementation and that all the planes will be equipped with an indigenous Electronic Warfare Suite (EWS).

"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, CEO of Airbus Defence and Space.

"The C295 has proven again as the segment leader, and with the addition of India as a new operator, the type will enlarge its footprint even more, not only on the operational aspects but on its own industrial and technological development," he said.

Sukaran Singh, Managing Director and Chief Executive Officer, Tata Advanced Systems Limited, described the sealing of the deal as 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. This endeavour demonstrates Tata Advanced Systems' capabilities as a defence manufacturer to build globally competitive complex platforms in India," he said.

In a statement, Airbus said 'Make in India' is at the heart of its strategy in India, with the company constantly increasing the country's contribution to its global product portfolio.

It said the C295 programme will see Airbus bring its complete bouquet of world-class aircraft manufacturing and servicing to India in collaboration with its industrial partners, including the Tatas and leading defence public sector units such as Bharat Electronics Ltd and Bharat Dynamics Ltd.

With a proven capability of operating from short or unprepared airstrips, the C295 is used for tactical transport of up to 71 troops or 50 paratroopers, and for logistic operations to locations that are not accessible to current heavier aircraft, it said.

The aircraft can airdrop paratroops and loads, and also be used for casualty or medical evacuation. The aircraft is capable of performing special missions as well as disaster response and maritime patrol duties.

"The IAF becomes the 35th C295 operator worldwide, with the programme reaching 278 aircraft, 200 of which are already in operation and have booked more than half a million flight-hours," Airbus said.