The United Progressive Alliance Government's second biggest armament deal to purchase 197 light helicopters for the Army at a whopping $600 m has run into rough weather and may be scrapped.
The deal with European consortium Eurocopter is stuck at the final negotiation stage with some irregularities coming to light, defence sources said.
The government has asked the army which had evaluated the deal to submit final report after allegations surfaced that the Eurocopter had sent for trials its civilian Ecrueuli helicopter while offering its military version AS550 C3 Fennec for sale.
Under the deal, India was to buy 37 helicopters outright and make the rest at Hindustan Aeronautics Limited, Bangalore under technology transfer.
The army requires new helicopters to replace its vast fleet of ageing Chetak and Cheetah helicopters. Army had short-listed Eurocopter's AS550 C3 Fennec and US Textron Bell helicopter, which underwent a year-long trials in Siachen Glacier and in the Thar desert.
According to sources, fresh tenders may be floated soon. This is the second major deal in which army would be going in for re-tendering. Earlier, it had scrapped the 400 million deal to procure 400 155mm upgraded .52 calibre artillery guns.