Indian Navy will acquire 12 Japanese Shinmaywa’s long-range amphibious aircraft US-2i for an approximate $1.65 billion under the government-to-government deal.
The US-2i aircraft will be procured under the ‘buy global’ clause of the Defence Procurement Procedure, government sources were quoted as saying by Financial Express Saturday.
The deal, which is going to be government-to-government, was changed from ‘buy and make global’ to ‘buy global’ after amendments were made to two chapters of the DPP, and subsequent rounds of discussions with the industry association.
The deal found mention in the recent interaction between the two nations’ defense ministers in New Delhi earlier this month. The Defense Minister of Japan Gen Nakatani was paying a bilateral visit to India at the invitation of Indian Defense Minister Manohar Parrikar. The two ministers held the annual Defense Ministerial Meeting on 14 July 2016 in New Delhi.
A senior officer was quoted by FE as saying that, “The plan to Buy Global will be sent to the Defence Acquisition Committee in a couple of months before any formal decision is made. Also, there will be a 30% offset clause that the Japanese side will be signing. ”
A source in the Japanese company told defenseworld.net last week that, “The case is still to go to Services Capital Acquisition Requirement Categorization Board (SCAP) and later to Cabinet Committee for Security and is likely that the SCAP will be appointed in August.”
The deal, which has an approval of the Department of Industrial Policy and Promotion, is waiting for an acceptance of necessity (AON) from the Indian Navy. While the army, navy and the coast guard are supporting the requirement of these planes, “It will be like an AON that the navy requires 12 US-2i as of now, and the commercial negotiations for them can begin. The coast guard, in turn, may require five such planes,” explained a defence ministry source.
The Indian Navy had issued a request for information (RFI) for the aircraft. Canada’s Bombardier, Japan’s ShinMaywa and Russia’s Beriev had offered their aircraft to meet the requirements.
Speaking to FE, a senior officer said, “All the three aircraft failed in the field evaluation trials (FET), carried out on calm and rough seas because there is a lack of experience of the Indian Navy in amphibian aircraft operations.”
The procurement of 12 amphibious Aircraft from Shinmaywa of Japan which has been held up due to bureaucratic procedures in India could face further headwinds following the release of new defence procurement procedures(DPP). The procurement proposal had gone up to the Defence Acquisition Council (DAC), India's supreme defence purchase body chaired by the defence minister, which delayed an expected go-ahead to the deal last year for reasons not disclosed
India will not be closing the $1.6 billion Shinmaywa amphibious military aircraft deal during Japanese Prime Minister Shinzo Abes expected visit to India this month
Indias Comptroller and Auditor General (CAG), in its report tabled in the Parliament Tuesday, has slammed both the Indian Air Force (IAF) and Boeing for various shortcomings in $2.7 billion contract for the C-17 Globemaster transport aircraft
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