Thursday, July 25, 2024

Offset Status ‘Remains Unclear’ On ‘TASL-Airbus’ C-295 Deal

By Aritra Banerjee

India’s Ministry of Defence (MoD) inked a ₹22,000 crore deal with Airbus Airbus Defence and Space S.A., Spain, to procure 56 C-295 Medium Weight transport aircraft for the Indian Air Force (IAF). This procurement contract aimed to replace the IAF’s vintage fleet of 56 Avro’s, which have remained in the IAF’s inventory since the 1960s.

The C-295 deal would hold the distinction of being the first ‘Make-In-India’ defence contract to be manufactured under Transfer of Technology (TOT) within the country by a private sector firm. The induction would also make the IAF the world’s 35th operator of the C-295.

Sukaran Singh, the Managing Director and Chief Executive Officer of Tata Advanced Systems Limited (TASL), had told the media that it would be the first time a private company would entirely manufacture an aircraft in India. In partnership with Airbus, he explained that TASL will “will literally take raw aluminium ingots on one end and convert it into a flyaway aircraft on the other end.”

TASL-Airbus Partnership: A Decade In The Making

Tata group and Airbus decided to collaborate on the program over a decade ago (11 years since the contract was signed in 2021). It may be poignant to know that the program was one of the last projects Tata Sons former Chairman Ratan Tata had helped spearhead.

Both companies are yet to finalise the location of the manufacturing facility. Over 100 possible sites have been scouted based on airstrip length, availability of infrastructure, social indicators, and other considerations.  

Once operational, “The aircraft will give a major boost to the tactical airlift capability of the IAF, especially in the northern and northeastern sectors and the Andaman and Nicobar Islands,” the Defence Ministry stated. The C-295 has a capacity of five to 10 tonnes and is deployed for tactical transport of troops as high as 71 personnel or 50 paratroopers. The aircraft can also facilitate logistics in places otherwise deemed inaccessible by heavier planes in the IAF’s current inventory.

Modalities Of The C-295 Deal

16 out of the 56 aircraft will be delivered in ‘flyaway’ condition from Spain within four years, while the remaining 40 will be ‘Made-In-India’ by Tata Group within a decade of the contract. The IAF is slated to receive the first C-295 in two years. As mentioned earlier, the total delivery of the 16 aircraft is expected to be completed within four years, Rémi Maillard, President of Airbus India and Managing Director of the South Asia region, explained.

“Eventually, the C-295 will be made in India with the creation of 15,000 direct jobs and 10,000 indirect jobs over the coming 10 years, and that is significant,” said Jean-Brice Dumont, Executive Vice President military aircraft of Airbus.

Offset Contract & Status

The offset contract signed between the Defence Ministry and Airbus Defence and Space requires the latter to discharge its offset obligations by directly purchasing eligible products and services from its Indian offset partners.

IA&D asked Airbus Defense and Space about the ‘offset status’ on the C-295 deal. The publication also inquired about the tentative time frame for the offset implementation, and whether or not the offset execution could be incorporated through other military or civilian contracts.

Neha Vij representing Airbus Defense and Space responded to IA&D’s requests for comments by saying: “It’s too premature to speak on this topic.” However, they added that the question could be “revisited” around Defence Expo 2022.


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