Indian government approves purchase of 56 Airbus C295MW for its Air Force

After 4 years of virtual stalemate, the Security Committee of the Council of Ministers finally gave the go-ahead for the purchase of 56 Airbus C295MW tactical transport aircraft from Airbus, which will replace as many Avro-748s of the Indian Air Force (IAF).

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IAF to get 56 new transport aircraft. Details here: https://t.co/WUYbxphdlq #AtmaNirbharBharat @rajnathsingh @adgpi @PIB_India @PIBHindi @indiannavy @IAF_MCC @drajaykumar_ias @AjaybhattBJP4UK @DefProdnIndia @IndiainSpain pic.twitter.com/EiVQrkRDat

— A. Bharat Bhushan Babu (@SpokespersonMoD) September 8, 2021

As we reported in January, it had been announced that this large contract, valued at around $2.5 billion, was at the financial approval stage and was expected to be initialed sometime in 2021. After getting government committee approval, it seems feasible that the deal with Airbus will be signed before December 31.

A long process

The IAF received the go-ahead from the Ministry of Defense to seek a replacement for its aging Avro transports in 2012. In 2014, despite tenders sent to several companies, including Lockheed-Martin, Saab, Alenia Aeronautica (now Leonardo), Ilyushin and Embraer, the only company to reply with a bid was the Airbus-Tata partnership, proposing the C295MW.

Negotiations began between the Indian Ministry of Defense and Airbus-Tata in early 2017, but are believed to have slowed to a complete halt, due to a cost issue, a serious hurdle amid tight budgets. And no doubt the global economic slowdown, the result of the pandemic, only made the situation worse.

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Earlier concerns about a «single tender» procurement process were quashed, recognizing that no other supplier had bids to submit that met India’s specifications.

At the time, the Indian Coast Guard had also expressed interest in a small fleet of C295s equipped for near-shore maritime missions. But those aircraft are not contemplated in the present procurement process.

Make in India

Under the Make in India initiative, which seeks the increasing nationalization of the defense industry, the deal (closed in 2019) provides for 40 of the 56 aircraft to be manufactured in the country. To this end, Airbus Defense & Space and Tata Advanced Systems Limited (TASL) carried out a strategic partnership that provides for the transfer of technology for local manufacturing.

According to the Ministry of Defense press release, 16 aircraft will be delivered in fly-away condition from Spain within 48 months from the signing of the contract and 40 aircraft will be manufactured in India by the TATA Consortium within ten years.

This is the first project of its kind in which a military aircraft will be manufactured in India by a private company, as until now, all such contracts were assigned to the state-owned Hindustan Aeronautics Limited (HAL).

The 56 aircraft will receive an indigenous electronic warfare package, and most likely with some other indigenous avionics equipment.  The project will give a boost to India’s aerospace ecosystem, where several SMEs (Small and Medium Enterprises) spread across the country will be involved in manufacturing the aircraft parts.

The program offers a unique opportunity for the Indian private sector to enter a highly competitive and technology-intensive aviation industry. The project will increase domestic aircraft manufacturing, which will reduce import dependence and increase exports.

A large number of detail parts, sub-assemblies and major component assemblies of airframes are expected to be manufactured in India. The program will act as a catalyst for employment generation in the country’s aerospace ecosystem and is expected to generate 600 high-skilled jobs directly, over 3,000 indirect jobs and another 3,000 medium-skilled employment opportunities within India’s aerospace and defense sector.

It will involve the development of specialized infrastructure in the form of hangars, buildings, runways and taxiways.  Level «D» maintenance facilities (major maintenance usually performed at the original manufacturer’s facilities) for C-295MW aircraft are planned to be built in India. This is expected to make India a regional maintenance and upgrade center for several variants of C-295 aircraft in the Asia-Pacific region.

C295MW, the 2-in-1 combo

While the first (and most urgent, given its high accident rate) intention is to replace the aging and worn out Avro-748 fleet, the C295MW is an ideal candidate to also replace the Antonov An-32, the IAF’s main tactical airlift, which has close to 100 units in active service.

Eventually India will have to undertake the replacement of the An-32, which represents a fabulous potential business of a hundred aircraft, for which Airbus would have the inestimable advantage of already being there, installed and operating as local.