BANGALORE India is planning to place an estimated $10 billion order for 126 fighter jets by September as it looks to upgrade its ageing fleet, the country's air force chief said Thursday.
The deal would be the biggest of its kind globally in the past 15 years. India wants to modernize its nearly five-decades-old aircraft fleet, procured mostly from the former Soviet Union, and keep its air force competitive with regional powers China and Pakistan.
India currently uses fighter jets such as the Sukhoi Su-30MKI, Mirage 2000 and Jaguar. The country has also developed its first indigenous light combat aircraft, the Tejas, which is expected to be inducted into the Indian Air Force in 2015.
"I hope in the next two to four weeks, the commercial negotiations [for the order of 126 jets] should be starting," Air Chief Marshal Pradeep Vasant Naik told reporters at the Aero India 2011 show in Bangalore.
Six companies have been chosen to bid for the fighter jet contract. U.S.-based Lockheed Martin Corp. and Boeing Co. are pitted against United Aircraft Corp., France's Dassault Aviation S.A., pan-European manufacturer Eurofighter Jagdflugzeug GmbH and Saab AB.
Lockheed has offered the F-16 fighter jet and Chicago-based Boeing has pitched the F/A-18. Other planes in the reckoning are Russia's MiG-35, the Saab Gripen, Dassault's Rafale and the Eurofighter Typhoon.
Mr. Naik said a sore point in several defense deals, the so-called offset obligation, won't be an issue for the 126-jet deal.
Under current rules, foreign companies that receive import orders in excess of 3 billion rupees ($66 million) must manufacture at least 30% of the order value in India, or make a similar-sized investment in the country.
The government has set the offset obligation for the 126 fighter jet contract at 50% of the value of the deal.
Apart from buying new fighter jets, India is also focusing on upgrading its existing fleet of Mirage 2000 and Jaguar jets, Mr. Naik said.
He said a draft report for upgrading the Mirage 2000 aircraft has been submitted to the Ministry of Defense and is expected to be considered by the government for approval in this financial year through March.
"The upgradation will increase the operational life of the Mirage by another 20 years," he added.
The Air Force has a fleet of 50 Mirage 2000 combat jets, which were made by Dassault Aviation with electronic parts from Thales.
Separately, Deputy Chief of Air Staff, Air Marshal R.K. Sharma, said responses are expected from Honeywell and Rolls-Royce Group PLC to upgrade more than 60 Jaguar fighter jets and 200 engines.
The Air Force also expects to induct the first fifth-generation fighter jet in 2017, with plans to induct 200-250 such planes in the fleet over the longer term, Mr. Naik said.
The fifth-generation fighter jets will be produced by state-run Hindustan Aeronautics Ltd. in collaboration with Russia's Sukhoi Company.
The Air Force is also conducting trials to acquire 22 attack helicopters and a final report on performance is expected in about a fortnight, Mr. Naik said.
Boeing has offered its Apache AH-64D Longbow attack helicopter for the contract, while Russian company MiL Moscow Helicopter Plant's Mi-28 is also in the race.
Mr. Naik also said the Air Force plans to order 80 medium-lift helicopters from MiL Moscow this year and may order an additional 50 at a later date.
He said trials for the potential contract for 15 heavy-lift helicopters have also reached the final stage. Boeing's CH-47F Chinook heavy-lift, twin-rotor helicopter and MiL's MI-26 are vying for the contract.
The Air Force will also submit flight trial reports for acquiring 197 light-utility helicopters within a couple of days. Eurocopter, a unit of European Aeronautic Defence & Space Co. EADS N.V. and Russia's Kamov are in the running for the order.
