* India looking to develop domestic defence industry
* Minister says public sector firms ought to be involved
* Defence Ministry to look into complaint
By Anurag Kotoky
NEW DELHI, Oct 9 A plan to attract private
Indian firms to help build military aircraft could be delayed
after a cabinet minister said the proposal was unfair to
India has emerged as the world's biggest arms importer as it
tries to update archaic weapons systems to keep up with
neighbours China and Pakistan in a $100 billion modernisation
The government wants to encourage private Indian companies
to partner with foreign suppliers to reduce its reliance in
imports and help develop a domestic defence industry that has so
far been beholden to underperforming public sector companies.
In May, the Defence Ministry launched a tender to buy and
build 56 military transport planes to replace an ageing fleet of
Avro jets at an estimated cost of 119 billion Indian rupees
($1.9 billion.) The ministry said the deal must be struck
between a foreign supplier and an Indian private firm.
However, Heavy Industries Minister Praful Patel said on
Wednesday that the public sector utilities (PSUs) already making
products for the armed forces should have been given a chance to
take part in the bidding process.
"All I am saying is, our companies, the PSUs, are
extraordinary companies which have great capabilities and they
have time-tested proven abilities and they have been doing this
job for years and years," Patel told a television station after
writing a letter to the defence minister.
"There is no reason why an Indian PSU should have an
exclusion in the contract," Patel said.
The Defence Ministry said it would now look into Patel's
complaint, potentially delaying the tender process. Many of
India's foreign arms purchases run into long delays because of
accusations of corruption and complicated bureaucracy.
Despite Patel's confidence in India's state-run defence
manufacturers, their track record is patchy. Hindustan
Aeronautics Ltd (HAL), the country's main defence aeronautics
supplier, has been developing a light combat aircraft since the
early 1980s with no success so far.
India's $15 billion deal with France's Dassault Aviation
to buy 126 Rafale fighter jets is yet to be finalised,
partly because the French company doubted HAL, its mandatory
partner, had the technological capability to manufacture such a
sophisticated fighter jet.
The Indian air force told the Defence Ministry in July it
did not want to buy a trainer plane under development by HAL,
preferring a cheaper and more efficient imported plane.
Air Force chief N.A.K. Browne said on Friday HAL's attempt
to build a trainer jet was "extravagant". He said the company's
prototype was not powerful enough, according to a report by news
agency the Press Trust of India published on the Economic Times
HAL also made the engines in India's collection of MiG
fighter jets, commonly known as flying coffins because of their
appalling crash record. More than half the MiG fleet of 872
aircraft has been lost to crashes that killed 171 pilots,
Defence Minister A.K. Antony told parliament last year.
HAL has said it significantly contributes to the armed
forces with locally made products, and is revamping its
capabilities and capacities as part of a modernisation drive.
Many blue chip Indian companies, including billionaire
Mukesh Ambani's Reliance Industries, Larsen & Toubro
Ltd (L&T) and Mahindra and Mahindra have
been gearing up to take part in India's push to build a local
The tender to replace the Avro fleet was sent to five
foreign companies, including Boeing, Lockheed Martin
and EADS CASA.
The government expected deliveries to start within a year of
finalising the contract, Antony told parliament this year.