After confusion over who would decide the commercial aspects of the order, the case is set to move to the Defense Acquisitions Council (DAC), headed by the defense minister, for Acceptance of Necessity (AoN).
The India-Japan Joint Working Group (JWG) have held preliminary meetings to initiate the process for acquisition of the ShinMaywa US-2i amphibious aircraft for the Indian Navy.
In a statement issue today, the company said it was left ‘with no other option but to invoke arbitration through Counsel’. It said this came after it made several requests to the defense ministry for invoking bilateral discussions as provided in the contract.
Carter is looking at the Indian defense ministry to make it easier for US companies to do business with it and wants resolution of issues related to offsets, limitation of liability and delays in decision-making.
Kavi kehna kya chahta hai? Giving the iteration a thumbs-down, defense industry executives questioned the rationale behind some of the amendments and also expressed pessimism, saying in some cased it would ‘make things worse’.
These changes are skewed to favor and encourage defense industry in India, some of which appear to have been influenced by reactions to corruption scandals. Do have a look at the list of changes, copied and pasted, verbatim, from the defense ministry press release.
The program was for the procurement of 56 aircraft of which 16 would be delivered off the shelf by a foreign manufacturer and 40 were to have been manufactured in India. Indian industry has found the order to be too small to justify the capital expenditure.
Life Cycle Cost was not a consideration in the earlier contest, in which the Airbus A-330 MRTT was selected over the IL-78, before the tender was withdrawn. This time the factor is expected to be a key determinant of the acquisition cost of the two aircraft.
StratPost tweeted facts about the Indian Air Force (IAF) tender for 126 Medium Multi Role Combat Aircraft (MMRCA) and the participating aircraft last week. Here they are on a single page, for easy reference. And please feel free to add any more in the comments. They will be updated on this page.
Minister of State for Defense Mallipudi Mangapati Pallam Raju: “There is tremendous potential for enhancing the defense industry cooperation between the two sides, particularly in the context of defense offset policy, the scope of which has recently been increased.”