Significant Milestone: Five Major Capital Acquisition Contracts Worth Rs 39,125 Crore Signed by Ministry of Defence

Defence Industry

New Delhi: The finalisation of five major capital acquisition contracts worth Rs 39,125.39 crore by the Ministry of Defence (MoD) on March 1 marked a significant milestone. Aimed at bolstering India’s defence capabilities, these contracts were signed with Hindustan Aeronautics Limited (HAL), BrahMos Aerospace Private Limited (BAPL) including the largest military deal for an Indian private sector company, Larsen & Toubro (L&T).

The contracts included upgraded fighter jet engines, supersonic cruise missiles, close-in weapon systems, high-power radars, and ship-borne BRAHMOS systems. These contracts, cleared by the Cabinet Committee on Security (CCS) last week, were inked in presence of Defence Minister Rajnath Singh and Defence Secretary Giridhar Aramane. With deliveries to start in the next two to three years, these contracts will generate employment and involve micro, small & medium enterprises.

“These deals will further strengthen indigenous capabilities, save foreign exchange and reduce dependency on Foreign Origin Equipment Manufactures in future,” the official release stated.

A pivotal contract valued at Rs 5,249.72 crore for the procurement of aero-engines essential for MiG-29 aircraft was clinched by Hindustan Aeronautics Limited (HAL). Under this agreement, HAL’s Koraput Division will spearhead the production of these engines, contributing significantly to the operational readiness of the Indian Air Force’s fleet. The incorporation of Transfer of Technology (TOT) from the Russian original equipment manufacturer (OEM) underscores India’s commitment to indigenisation efforts, particularly in critical components for future Repair and Overhaul (ROH) tasks.

Securing two distinct contracts, collectively valued at Rs 13,369.95 crore, Larsen & Toubro Limited reaffirmed its pivotal role in advancing India’s defence infrastructure. The first contract, worth Rs 7,668.82 crore, pertains to the procurement of Close-in Weapon System (CIWS), augmenting terminal air defence capabilities at strategic locations nationwide. This initiative not only fortifies India’s defence apparatus but also stimulates active involvement from indigenous aerospace, defence, and MSME sectors, fostering job creation and economic growth.

According to the release, “The direct and indirect employment generated by this project would be approximately average of 2,400 persons/ year over the period of five years.”

Larsen & Toubro bagged another contract valued at Rs 5,700.13 crore, for the acquisition of High-Power Radar (HPR). This cutting-edge radar technology represents a paradigm shift in indigenous radar manufacturing, marking a significant milestone as the first-of-its-kind radar developed by the private sector in India. The integration of advanced surveillance features promises to revolutionise terrestrial air defence capabilities, replacing existing long-range radars within the Indian Air Force.

In order to enhance India’s defence arsenal, two contracts were also signed with BrahMos Aerospace Private Limited (BAPL). The first, worth Rs 19,518.65 crore, is for the procurement of BrahMos missiles to meet combat outfit and training requirements of the Indian Navy. The second, worth Rs 988.07 crore, is for the procurement of Shipborne BrahMos system, the Indian Navy’s primary weapon for maritime strike operations.

These contracts underscores India’s commitment to bolstering its indigenous defence capabilities. These acquisitions not only reinforce India’s defensive posture but also signify a significant stride towards self-reliance in defence manufacturing, aligning with the overarching ‘Aatmanirbharta in Defence’ initiative. By fostering indigenous manufacturing, leveraging cutting-edge technologies, and reducing dependency on foreign suppliers, India is poised to emerge as a global leader in defence innovation.