World's largest combat jet deal under way as India starts process

The Indian Air Force and Navy require as many as 400 single- and double-engine combat aircraft, according to the government.
The Indian Air Force and Navy require as many as 400 single- and double-engine combat aircraft, according to the government.PHOTO: AFP

NEW DELHI (BLOOMBERG) - India has moved a step closer to inviting bids for the purchase of 114 fighter jets, currently the world's largest deal in play, as Prime Minister Narendra Modi seeks to boost the capability of the country's armed forces and replace an ageing combat aircraft fleet.

The deal - valued at more than US$15 billion (S$20.33 billion) - has attracted initial offers from global defence majors, including Boeing Co, Lockheed Martin Corp and Sweden's Saab AB.

At least 85 per cent of production has to be in India, according to an initial document issued more than a year back.

Modernising the country's defence forces is critical for Mr Modi, who hardly signed any new major arms deals during his first term, even as twin threats from neighbouring China and Pakistan loomed.

A Pakistani F-16 jet downed an ageing Soviet-era MiG 21 - the Indian Air Force's mainstay - in a dogfight during a military confrontation earlier this year.

EVALUATION BEGINS

The evaluation of initial bids and finalising the Air Forces' requirements has begun, Junior Defence Minister Shripad Naik told lawmakers in Parliament.

India is also drafting initial documents to purchase tanks and armoured vehicles, as well as asking foreign shipbuilders to show interest to manufacture submarines in India, he said.

The Indian Air Force and Navy require as many as 400 single- and double-engine combat aircraft, according to the government.

 
 

Boeing is partnering with state-run Hindustan Aeronautics Ltd and Mahindra Defence Systems Ltd for the fighter jet deal, offering its F/A-18. Lockheed will jointly bid with salt-to-software conglomerate Tata Group for its F-21 jets, and Saab teamed with billionaire Gautam Adani to offer its Gripen jets.

After scrapping an order with Dassault Aviation for 126 Rafale jets worth US$11 billion in 2015 - a process that took nearly a decade - Mr Modi's administration bought 36 jets separately.

Under the new tender, the winner will have to deliver the first jet within three years of securing the contract.