Airbus, Tata set precedent with C-295 approval

An Airbus C-295 aircraft at Seville, Spain in May 2013. | Photo: StratPost

After many delays the proposal to replace the Indian Air Force (IAF) fleet of Avro HS 748 medium transport aircraft appears to finally be reaching fruition.

The Indian Defense Acquisitions Council (DAC) cleared the selected single bid of an Airbus-Tata combine to supply the C-295 aircraft to the IAF. While 16 of the aircraft will be produced by Airbus at its facility in Spain, the rest of the 40 will be built in India.

This order, worth INR 11,929 crore (USD 1.8 billion) represents the setting of several precedents in the Indian defense procurement process, being the first time a complete and privately-run aircraft production facility will be set up in India to ‘Make in India’. It was the first procurement plan which was especially intended by the IAF and the defense ministry to be solely partnered in India by private players.

This caused considerable delays in submission of bids, since no Indian company, besides the industrial giant Tata, could bring itself to commit to the capital expenditure required to set up an assembly line in India, without orders for production of more than the 40 aircraft planned to be built in India under this procurement.

Secondly, and partly as a consequence of the above, no foreign OEM (original Equipment Manufacturer) of aircraft of this class actually ended up with a bid for this order, with the result that this was a single-vendor bid, something that can easily give rise to further challenges for approval under the Defense Procurement Procedure (DPP).

For instance, Italy’s Alenia Aermacchi would have liked to bid with an Indian prime with its C-27J Spartan, but perhaps, since the aircraft is certified only for military aviation, there may not have been much potential for additional orders for civilian applications.

Saab would have liked to partner with an Indian company with its SAAB 2000 aircraft, but it is understood there were also technical complications with respect to the absence of a rear ramp in the existing design, besides the fact that the aircraft is not actually in production.

Finally, the entire idea of replacing the IAF fleet of Avro aircraft was also challenged last December, with questions reported to have been raised about the cost, and alternatives for upgrading the Avro aircraft by Indian Defense Public Sector Units (DPSUs) being proposed.

Prime Minister Narendra Modi visited the Airbus facility in Toulouse during his visit to France last month and the Airbus-Tata bid is understood to have come up for discussion.

Airbus, on its part, is not new to the business of setting up aircraft assembly lines in other countries. The European aviation giant transferred its C-235 assembly line to Indonesia. The C-235 is a smaller aircraft in comparison to the C-295.

Airbus now offers an upgraded C-295 to all customers and it is understood that this variant has been proposed for production to the IAF. There could be other orders, as well.

At some point, the aircraft could be considered to replace the IAF AN-32 aircraft and could also be a platform for navy and coast guard requirements for medium range aircraft, besides the possibility of foreign orders.

But right now the proposal still has to be approved by the finance ministry and the Cabinet Committee on Security (CCS) before the order is finally signed off.