New Delhi. Eurocopter has won the Indian Army’s much awaited deal for 197 modern light helicopters, estimated at around US$ 550 million.
The Indian Army has chosen the Eurocopter’s AS 550 C3 Fennec over the Bell Helicopter’s Bell 407 after trials in hot, humid and high altitude conditions in Rajasthan, Punjab and Kashmir, including in Siachen – the Himalayan battlefield between Indian and Pakistani forces.
The new machines will replace the old and aged 1970s generation Chetak and Cheetah helicopters of the Indian Army, which has an appropriate plan to modernize and expand its Army Aviation Corps (AAC) in line with current and future rapid mobility battlefield requirements.
Eurocopter will supply 60 helicopters in a fly-away condition, made at its plants in France and Germany, while the remaining 137 will be manufactured by Hindustan Aeronautics Limited (HAL) at its Bangalore facility.
Company sources told India Strategic that it would take three years to supply the Made in Europe lot, but that assembly lines would be set up simultaneously at HAL to facilitate their manufacture in India under Transfer of Technology (ToT).
Eurocopter also has the obligation to invest 30 percent of the deal back in the Indian defence industry under the now mandatory offset clause, a brainchild of Defence Secretary Shekhar Dutt.
Commercial negotiations between Eurocopter, a subsidiary of the European Aeronautic Defence and Space (EADS) company, and the Ministry of Defence (MoD) are slated to begin this month to fine-tune the deal as also to work out the weapons and electronic warfare package. A formal contract would be signed then.
The cost of weapons and other systems would be extra.
There was no official confirmation of the deal but informed sources said that it was a tough choice between the two machines, and that a preference had to be made nonetheless in accordance with prescribed parameters.
HAL has manufactured more than 600 Chetaks and Cheetahs, variants of the French Alouette, of which some 350 are used by the Indian Army.
The remaining are with the Indian Air Force (IAF), Navy and Coast Guard. It stands to reason that as their helicopters also need replacement, the Eurocopter’s current order would multiply three-fold over the next few years to nearly $2 billion.
The three services have had an element of commonality in some systems in the past, but now, this is a requirement mandated by MoD to effect savings both in money and time. It is cheaper to manufacture and maintain a common system.
According to Lt Gen Vinayak Patankar (Retd), defence analyst and India Strategic’s Editor Army, the acquisition of the new helicopter is timely and that the Indian Army had been looking for a sophisticated, multi-role machine for some 15 years. It has to be used for Reconnaissance and Observation, Electronic Warfare, Anti-Tank role, and also to inject and extricate personnel from the battlefield.
Eurocopter is described by the manufacturing company as a light and agile machine which can be fitted with a variety of systems and weapons as required. It should not be difficult to integrate whatever the Indian Army wants, a company source said.
Incidentally, Allouette was the first turbine helicopter in the world, and its maker, Aerospatiale, was later absorbed into Eurocopter, which already has a strong relationship with HAL.
The two companies have an agreement to co-develop business, and EADS has supplied parts for the slightly bigger and versatile HAL made Advanced Light Helicopter (ALH) Dhruv, which has already been inducted by both the IAF and Army.
Eurocopter has offered to set up an extensive military-industrial base in India. Recently, it also interacted with some Indian industries at a seminar sponsored by the Confederation of Indian Industries (CII).
In fact, Norbert Ducrot, Eurocopter Senior Vice President Sales & Marketing Asia, said at the recent Aero India in Bangalore: “Eurocopter’s business focus in India for 2006 and 2007 is to further decisively increase our business platform by means of sales as well as by successful industrial deployment. For that reason, we are not only participating in the Indian Army Aviation tender for the Reconnaissance and Observation Helicopters with our proven AS 550 C3 Fennec, but we are currently discussing numerous opportunities for long-term industrial cooperation with Indian Aerospace industry especially regarding the 10 tons class helicopter.”
Fennec is powered by a single, Turbomeca Arrius engine built by the Safran group.
It is working out an arrangement with the Hindustan Aeronautics Limited (HAL) to outsource some equipment for the Fennec and Ecureuil – its civilian version – as part of creating a global supply chain, which should lead to some 150 senior-level jobs in India, he was quoted as saying.
It may be recalled that more than 70 percent of various systems with the Indian armed forces are of Soviet vintage, and all the three services have been starved of modernization due to the freeze imposed by the V P Singh government over allegations of corruption in the Bofors guns deal in the late 1980s.
Problems with one deal should certainly have been looked into but the case should have been isolated for inquiry. A blanket ban on acquisition has harmed the armed forces immensely, many retired officers have observed.
The 1999 Kargil war, in which India neither had the gun locating radars to find and neutralize Pakistani artillery, nor adequate munitions for its Bofors guns, triggered the removal of the paralysis in the MoD, and ever since, many new systems from ships to submarines, tanks and aircraft have been ordered.
The deal for the Fennecs is the second helicopter deal by India, the first being the IAFfs follow-on order for 80 Mi 17 IV medium lift helicopters from Russia last year. Notably, all the helicopters with the Indian armed forces are more than 20 years old and need to be replaced.
According to a Bell Helicopter survey, the helicopter market in India will be worth about $4 billion over the next few years.
EADS President and CEO Lutz Bertling said during a recent visit to India that his company could supply the first helicopter within 2007 itself, adding that he was also willing for collaboration to produce a medium lift helicopter in India.
The Indian government had floated the requirement for the light helicopters in 2004 but revised it in 2005 to introduce the offset clause. Initially, there were five contenders including Agusta (Italy), Bell (US), Eurocopter, and Kamov and Kazan (Russia).
EADS manufactures the Ariane rockets used sometimes by the Indian Space Research Organisation (ISRO) for its satellite launches as also the commercial Airbus aircraft.
According to an EADS statement, HAL has a contract to provide 600 sets of doors for various Airbus aircraft, and of which it has delivered over 300. A new batch of A320 doors has been ordered recently. HAL has also produced parts for the A320 nose undercarriage. The production of A340 emergency doors is also due to start at HAL.
As for Fennec, Eurocopter says that the military-certified Fennec can operate both during day and night, and can be used in antitank and attack roles as well as for training, medical evacuation, Search and Rescue (SAR), cargo and sling transport. It is also easy on maintenance.
