By Gulshan Luthra
New Delhi: Eurocopter has won the Indian Army's much-awaited deal for 197 modern light helicopters, estimated at around US$ 550 million.

According to a report in the latest issue of India Strategic magazine on defence and foreign affairs, the army chose Eurocopter's AS 550 C3 Fennec over the Bell Helicopter's Bell 407 after trials in hot, humid and high altitude conditions in Rajasthan, Punjab and Kashmir, including in Siachen - the Himalayan battlefield between Indian and Pakistani forces.

The new machines will replace the old and aged 1970s generation Chetak and Cheetah helicopters of the Indian Army, which has an appropriate plan to modernize and expand its Army Aviation Corps (AAC) in line with current and future rapid mobility battlefield requirements.

Eurocopter will supply 60 helicopters in a fly-away condition, made at its plants in France and Germany, while the remaining 137 will be manufactured by Hindustan Aeronautics Limited (HAL) at its Bangalore facility.

Company sources told India Strategic that it would take three years to supply the Made in Europe lot, but that assembly lines would be set up simultaneously at HAL to facilitate their manufacture in India under Transfer of Technology (ToT).

Eurocopter also has the obligation to invest 30 percent of the deal back in the Indian defence industry under the now mandatory offset clause, a brainchild of Defence Secretary Shekhar Dutt.

Commercial negotiations between Eurocopter, a subsidiary of the European Aeronautic Defence and Space (EADS) company, and the Ministry of Defence (MoD) are slated to begin this month to fine-tune the deal as also to work out the weapons and electronic warfare package. A formal contract would be signed then.

The cost of weapons and other systems would be extra.

HAL has manufactured more than 600 Chetaks and Cheetahs, variants of the French Alouette, of which some 350 are used by the Indian Army.

The remaining are with the Indian Air Force (IAF), Navy and Coast Guard. It stands to reason that as their helicopters also need replacement, the Eurocopter's current order would multiply three-fold over the next few years to nearly $2 billion.

The three services have had an element of commonality in some systems in the past, but now, this is a requirement mandated by MoD to effect savings both in money and time. It is cheaper to manufacture and maintain a common system.

According to Lt Gen Vinayak Patankar (Retd), defence analyst and India Strategic's Editor Army, the acquisition of the new helicopter is timely and that as the Fennec is a sophisticated multi-role machine, the Indian Army could use it for Reconnaissance and Observation, Electronic Warfare, Anti-Tank role, and also to inject and extricate personnel from the battlefield.

The Indian Army, which needs many more helicopters for varied roles for medium to heavy lift requirements, had been wanting a light, agile machine the for the last 15 years to replace the now-vintage Alouette. Incidentally, Allouette was the first turbine helicopter in the world, and its maker, Aerospatiale, was later absorbed into Eurocopter, which already has a strong relationship with HAL.

The two companies have an agreement to co-develop business, and EADS has supplied parts for the slightly bigger and versatile HAL-made Advanced Light Helicopter (ALH) Dhruv, which has already been inducted by both the IAF and Army.

It may be recalled that more than 70 percent of various systems with the Indian armed forces are of Soviet vintage, and all the three services were starved of modernization due to the freeze imposed by the V.P. Singh government over allegations of corruption in the Bofors guns deal in the late 1980s.

The 1999 Kargil war, in which India neither had the gun locating radars to find and neutralize Pakistani artillery, nor adequate munitions for its Bofors guns, triggered the removal of the paralysis in the MoD, and ever since, many new systems from ships to submarines, tanks and aircraft have been ordered.

The deal for the Fennecs is the second helicopter deal by India, the first being the IAF's follow-on order for 80 Mi 17 IV medium lift helicopters from Russia last year.

Notably, all the helicopters with the Indian armed forces are more than 20 years old and need to be replaced.

According to a Bell Helicopter survey, the helicopter market in India will be worth about $4 billion over the next few years.

EADS President and CEO Lutz Bertling said during a recent visit to India that his company could supply the first helicopter within 2007 itself, adding that he was also willing for collaboration to produce a medium lift helicopter in India.

The Indian government had floated the requirement for the light helicopters in 2004 but revised it in 2005 to introduce the offset clause. Initially, there were five contenders including Agusta (Italy), Bell (US), Eurocopter, and Kamov and Kazan (Russia).

EADS manufactures the Ariane rockets used sometimes by the Indian Space Research Organisation (ISRO) for its satellite launches as also the commercial Airbus aircraft.

According to an EADS statement, HAL has a contract to provide 600 sets of doors for various Airbus aircraft, and of which it has delivered over 300. A new batch of A320 doors has been ordered recently. HAL has also produced parts for the A320 nose undercarriage. The production of A340 emergency doors is also due to start at HAL.
-IANS