India has cleared a Euro 950 million deal (Rs 6,480 crore) to procure 500 air-to-air missiles from a French firm for Indian Air Force's Mirage 2000 aircraft fleet.
A Cabinet Committee on Security meeting chaired by Prime Minister Manmohan Singh on Wednesday cleared the deal to procure 490 MICA missiles manufactured by French firm MBDA for Euro 950 million, Defence Ministry sources said in New Delhi.
The missiles would be deployed on the 51 Mirage 2000 aircraft, which are already undergoing upgrades at French facilities under a Euro 1.47 billion deal signed earlier this year.
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New missiles for IAF's 51 Mirage 2000 fighters
Under the deal, MBDA will have to do offsets worth 30 per cent of the deal meaning that they will have to invest 315 million Euros back in the Indian defence sector.
The Defence Procurement Procedure (DPP) mandates that foreign vendors bagging deals worth over Rs 300 crore have to invest back at least 30 per cent of the contract's worth into Indian defence, civil aerospace and homeland security sector.
India signed a deal with French companies Thales and Dassault Aviation, which will take ten years to carry out mid-life upgrade of IAF's 51 Mirage-2000 fighters.
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New missiles for IAF's 51 Mirage 2000 fighters
Two aircraft have already been flown to France for upgrades and the remaining would be modernised in India at Hindustan Aeronautics Limited (HAL) facilities here in India.
"The cost of the contract for upgrade of the Mirage 2000 with Thales is Euro 1,470 million while the cost of the contract with HAL is Rs 2,020 crore. The upgrade of the aircraft is expected to be completed by mid 2021," Defence Minister A K Antony had recently informed Parliament.
The defence ministry is now expecting the cabinet to also clear a proposal for about 75 Swiss-origin Pilatus basic trainer aircraft. For more than a year, cadets of the Air Force Academy have been learning the first lessons in flying with basic trainer aircraft since the Indian Air Force grounded the HPT 32 planes after repeated accidents that cost lives.
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