The Indian Air Force has concluded a $5.46 billion (INR 39,000 crore) deal with India’s state-run Hindustan Aeronautics Limited (HAL) for 83 Light Combat Aircraft Tejas at the cost of $65.78 million (INR 469.5) crore per jet.
“With the contract price now settled at INR 39,000 crore, the procurement file is being sent to the Cabinet Committee on Security for final nod. It should be cleared before this fiscal ends on March 31. Once the contract is inked, HAL promises to begin deliveries of the Mark-1A jets in three years,” a source was quoted as saying by Times of India on Monday.
Earlier, the contract was pegged at $7.91 billion (INR 56,000 crore). The reduction in cost has come after hard-nosed negotiations spread over a year between the IAF, the defense ministry and the manufacturer.
“HAL, for instance, was even charging profit on imported components. Item by item, the cost was brought down. IAF also cut down some of its support requirements,” the source added.