In a move to save costs and speed up delivery of Sukhoi fighter aircraft to Indian Air Force from Russia three-years ahead of schedule, Hindustan Aeronautics Limited has scrapped initial plans for full indigenisation of the warplane at its facilities in India, media reports said Friday.
An agreement signed recently between Russian arms firm Rosoboronexport and the Indian defence ministry has changed the timeframe of the completion of $3.5 billion (Rs 1,575 crore) contract for the licensed production of 140Su-30MKI fighters by HAL, Kommersant daily said.
The original Sukhoi license production deal signed in December 2000, the largest single Indo-Russian defence contract in 40 years, had provision for full indigenisation of the multi-role fighter planes at HAL facilities in India and last of the 140 Su-30MKI was to be delivered in 2017.
The amendments in the initial deal provide for the completion of delivery of 140 fighters in 2014 three years ahead of schedule with India declining to shift the whole production cycle to HAL facilities as the cost of the indigenously-produced fighter would have doubled, it said.
Russia, which has so far supplied 26 kits to HAL for the assembly of Su-30MKI, would earn an additional $350 million (about Rs 157 crore) through the supply of components by its companies, which otherwise would have been produced by HAL.
Sources in Russian supplier of Su-30MKI fighters Irkut Corporation have said that the deal could be closed even by 2012.
India's Comptroller and Auditor General in a report had said that cost of indigenous aircraft would be double the cost of the imported plane and the IAF would have to shell out $8.71 billion (about Rs 40,000 crore) for 140 fighters.
The daily said the Indian defence ministry's decision to review terms of the contract could have been prompted by apprehensions that it may overlap the planned acquisition of 126 medium multi-role fighters to phase out Russian-made and aging MiG-21 fleet.
The Indian decision to amend the original license deal would also give a breather for the modernisation and upgradation of Su-30MKI, designed in 1996.
The move comes in the backdrop of rapid modernization of their air forces by China and Pakistan, the daily said quoting a senior member of Moscow-based defence think-tank
Konstantin Makiyenko.
