India is likely to finalise the INR 40,000 crore contract for 83 Light Combat Aircraft (LCA) Tejas jets, 20% cheaper from previously quoted price, next February at DefExpo-2020 event in Lucknow city, Uttar Pradesh state.
In November 2016, Defense Acquisition Council (DAC), India's highest decision-making body on procurement, approved purchase of Tejas Mark-1A fighters by the IAF at a cost of Rs 50,025 crore.
Subsequent negotiations between defense ministry, Indian Air Force (IAF) and manufacturer Hindustan Aeronautics Limited (HAL) has helped bring down the price of the jets from INR 50,025 crore to INR 40,000 crore, Indian media reported late last week.
"The draft contract of the deal has been readied by the HAL and the cost of the deal has now come down to around Rs 40,000 crore. This is Rs 10,000 crore less than the Acceptance of Necessity given by the Defense Ministry in 2016," defense sources said.
In December 2017, the IAF had issued a single-vendor tender to the HAL for procuring 83 LCA, but the negotiations and other related issues have been going on since then mainly due to issues over the price.
The aircraft will have improved serviceability, faster weapon-loading time, enhanced survivability, a better electronic warfare suite and Active Electronically Scanned Array (AESA) radar that will significantly enhance its capability.
The Centre for Military Airworthiness and Certification (CEMILAC) had provided the Final Operational Clearance to the Tejas LCA earlier this year during Aero India in Bengaluru approving its capabilities including beyond visual range air-to-air and air-to-ground attack capabilities as well as longer endurance through mid-air refueling.
In a previous order, the IAF had signed a deal with the HAL for 40 Tejas LCAs. So far, around 18 LCAs have been delivered to the IAF from the previous order.