India is to invite global bids worth $2 billion (Dh7.3 billion) for 384 light helicopters in the second biggest military deal this year, defence ministry officials told AFP on Friday.
A source from the Indian government's weapons contract clearing agency said the call for tenders was finalised and approved on Thursday, and "will be sent out within two weeks" to global defence firms.
Bids would be invited from US-based Bell Helicopter, British-Italian firm AgustaWestland, Russia's Kamov and Eurocopter, a unit of the European Aeronautic Defence and Space Company (EADS).
"The initial worth of the contract will be $1.6 billion but the bill is likely to go up to $2 billion," said the official, who asked not to be named.
The proposed purchase incorporates 197 helicopters that the Indian government had agreed to buy from Eurocopter. But that $600-million deal was scrapped in December amid major controversy.
The defence ministry said there were "deviations" in the contract, and defence sources spoke of "irregularities" – a euphemism for corruption.
Eurocopter has denied any malpractice, and says it is optimistic of winning the new, larger tender.
The air force has added a requirement of 115 helicopters to the 197 units the army wanted, pushing the value of the deal to $1 billion and the number of aircraft to 312.
"The number has been since increased to 384 units due to new requirement projections," the defence source said, adding a separate tender was also likely to be issued this year for a large number of heavy-lift helicopters.
Recent months have seen a slew of big arms purchases by India, the largest buyer of armaments among emerging nations.
The country plans to spend $30 billion (Dh110 billion) until 2012 to modernise its 1.23-million-strong military, the world's fourth largest.
In January, New Delhi handed a $2.2-billion deal to France's Dassault to upgrade India's 51 ageing Mirage-2000 jets and last month it asked Lockheed Martin of the US to supply six Hercules transport planes for $1 billion.
An Indian deadline for five global military aviation giants to offer 126 fighter jets worth $12 billion also ends later this month.
India also plans to buy 40 Hawk trainer jets for its air force from Britain's BAE Systems in addition to 66 purchased for $1.45 billion in 2004.
The contracts show that India is becoming more diverse in it sourcing: ties with India's main arms supplier Russia have been facing difficulties over delays in deliveries and pricing.
The new light helicopter tender mandates that the company that wins the contract will have to re-invest up to 50 per cent of the total amount through tie-ups and services in India, other officials said.
"There will be new clauses which will bring in a larger volume of technology to India and offer us more transparency in the deal," a defence ministry official said, without referring to the Eurocopter controversy.
Officials said that 197 units would be bought off-the-shelf, while the remaining helicopters will be assembled by India's state-run Hindustan Aeronautics Ltd. in southern Bangalore city. (AFP)
India to float $2bn military helicopter tender