India Signs Off on U.S. Helicopter Deals Worth $3 Billion

The Indian and U.S. governments inked a pair of helicopter deals worth $3 billion during President Donald Trump’s visit. The two agreements cover a purchase of six AH-64E Apaches for the Indian Army and 24 Lockheed Martin-Sikorsky MH-60R Romeo multimission naval helicopters for the Indian Navy. Both contracts were expected to be signed during Trump’s visit and were pushed through the defense clearance process by India in anticipation of the U.S. president’s trip.

The AH-64Es will cost $930 million and begin being delivered in 2023. The MH-60Rs are to cost an estimated $2.6 billion, with deliveries to wrap up by 2023.

The Apache deal follows an earlier purchase in September 2015 of 22 AH-64Es allocated to the Indian Air Force. To date, 17 of these are in IAF hands, while the remaining five are due to arrive by the end of March.

The 2015 contract included an option for 11 additional Apaches, but funding pressures on the Indian defense budget are forcing India’s military planners to re-scope some procurement ambitions with an eye on smaller batch orders.

Another issue involved a power struggle between the Indian Air Force and the Indian Army over ownership of the attack helicopters. Back when the original contract was being prepared, the Army had pushed for full allocation to the Army Aviation Corps (AAC) instead of the Air Force, but the Indian Ministry of Defence rejected the request and insisted that the helicopters remain under the command of the IAF.

In lieu of this, the Indian Army requested that the MoD exercise the 11-unit option attached to the IAF’s Apache order so that it could absorb those AH-64Es into the Army Aviation Corps to equip its nascent Mountain Corps.

The Defence Acquisition Council (DAC) wavered, but on August 17, 2017, agreed to allow the MoD to order six Apache Guardians โ€“ instead of the full 11โ€‘unit complement โ€“ for the AAC. Though the deal was green-lighted by the DAC in August 2017, it was not until February 2018 that India issued a Letter of Request (LOR) to the U.S. government for the acquisition. That Foreign Military Sales (FMS) request was then approved by the U.S. State Department, with notification sent to Congress on June 12, 2018.ย  ย As mentioned above, the deal has an estimated price of $930 million.

The six-unit Apache purchase is being conducted in two parts, the first a direct commercial sale from prime contractor Boeing and the second the aforementioned government-to-government Foreign Military Sale. The direct commercial purchase covers the helicopters, logistical support, spare parts and associated services, while the FMS agreement involves the helicopters’ engines, electro-optical (EO) sensors, and radars.

The MH-60R procurement, on the other hand, is to be pursued directly through the U.S. government’s FMS channel.

 

About Daniel Darling

Dan Darling is a senior analyst covering both the Europe and Asia-Pacific regions for Forecast International's International Military Markets group.

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