The Indian Ministry of Defense is negotiating with Hindustan Aeronautics Limited (HAL) to place an order for 83 Tejas fighter jets for an estimated price to be around $3 billion (INR 22,000 crore), down from HAL-quoted price of $5 billion (INR 37,350 crore).
"HAL quoted INR 450 crore per aircraft as the basic price. The MoD and the Indian Air Force (IAF) are firm that this price is not competitive and are negotiating for a price that is less than INR 300 crore per aircraft. Negotiations are nearly complete and final price is likely to be in the range of INR 250-275 crore," a source privy to the negotiations was quoted as saying by TOI on Sunday.
If each unit costed INR 450 crore ($62.5 million), the value of the contract for 83 jets would be INR 37,350 crore ($5 billion). If one Tejas fighter costs INR 275 crore ($38.2 million), then the order will be worth INR 22, 825 crore ($3.17 billion).
Former defence minister Nirmala Sitharaman had pegged the total value of Light Combat Aircraft (LCA) order at INR 50,000 crore ($6.9 billion) in January, the report stated.
“Gripen fighter, manufactured by Swedish firm SAAB has features similar to LCA. It was costing less than INR 300 crore ($41.7 million) per plane. Why would anybody pay INR 450 crore ($62.5 million) for Tejas if they can buy Gripens for cheaper price? HAL must become competitive and be able to offer similar price," another source said.