In a major development towards acquiring 83 single-engine Tejas fighters for the Indian Air force (IAF), PSU Hindustan Aeronautics Limited (HAL) has agreed for an amount of Rs 39,000 crore. The HAL earlier had quoted a much higher amount of Rs 56,500 crore, which was rejected by both the IAF and Defence Ministry. Notably, the negotiations between the parties took more than a year and the prices are now finalised at Rs 17,000 crore less than the earlier quote for the overall cost of acquiring and support package form the homegrown Tejas Mark-1A jets.
One of the sources said, "With the contract price now settled at Rs 39,000 crore, the procurement file is being sent to the Cabinet Committee on Security for the final nod. It should be cleared before this fiscal ends on March 31. Once the contract is inked, HAL promises to begin deliveries of the Mark-1A jets in three years."
Lengthy negotiations over the price of Tejas
As a report published in the Times of India, the initial clearance for as many 83 of these aircraft was given by The Defence Acquisition Council (DAC) in November 2016 for Rs. Rs 49,797 crore.
Later, the HAL quoted a price of Rs Rs 56,500 crore leading to lengthy negotiations. However, further negotiations were halted due to exorbitant price quoted by the HAL, which the IAF had argued was more than the price of a Su-30MKI.
After the clearance, the IAF took another year to issue Request For Proposal (RFP) in December 2017. Former defence minister, Nirmala Sitharaman has formed a committee to negotiate the price.
Now with all the hurdle are in the stage of being cleared, the production of the Tejas LCA is expected to pick up the pace.
The IAF had requested 43 "improvements" in the Tejas Mark 1A over the Mark 1 and after the upgrades, the aircraft would be loaded with improved serviceability, faster weapon-loading time, enhanced survivability, a better electronic warfare suite and Active Electronically Scanned Array (AESA) radar.
