The new aircraft was to replace these vintage AVRO planes.
Prime Minister Narendra Modi is eager to "Make in India", but the private sector doesn't appear to be quite ready for it. So while Defence Minister Manohar Parrikar announced another big push today - clearing a proposal to acquire 814 artillery guns at a cost of Rs 15,750 crore - the decision on the joint bid by Tata Sons and Airbus to replace IAF's AVRO cargo planes was quietly deferred.
A similar fate met the proposal to acquire an additional 106 Swiss Pilatus basic trainer aircraft for the IAF at an estimated cost of around Rs 8,200 crore - for which the same companies had bid.
Officially, the reason is that the minister wants more time to study both proposals. But defence ministry sources said no other company had expressed interest in making the AVROs, which makes a single tender like situation for what is meant to be an open tender.
The $2 billion AVRO contract was announced last year, but didn't move thereafter.
After the Modi government began its "Make in India" push, it was revived with great hope. They were to be the first military aircraft built by an Indian private company on Indian soil. (
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The Prime Minister and his government had raised the foreign investment limit in defence after coming to power in May, saying companies which pledged to manufacture within India would get priority. The government is also moving to clear a backlog of military equipment orders and close the gap on strategic rival China.
The clearance of the long pending proposal to buy the artillery guns confirms the government's intention to stay on track. Of the 814 guns, the government intends to have 714 guns in India.
The Indian Army has not acquired artillery guns in nearly 30 years. The last purchase was the guns from Swedish firm Bofors, which triggered the multi-million dollar corruption scandal.
The plans to acquire the artillery guns guns were first mooted under Army's Field Artillery Rationalisation Plan under the Atal Bihari Vajpayee-led NDA government in 1999. The decisions were taken today at Mr Parrikar's maiden meeting of the Defence Acquisition Council.