After cost negotiations for over three years between the Ministry of Defence and Hindustan Aeronautics Limited, the price for procurement of advanced variant of the indigenously made Light Combat Aircraft Tejas has been slashed by nearly ₹18,000 crore.

The Ministry of Defence on Friday gave the go-ahead for the purchase of 83 Tejas Mark-1A aircraft for the Indian Air Force at a cost of ₹ 38,000 crore bringing down the price from earlier ₹ 56,000 quoted by the Hindustan Aeronautics Limited (HAL).

Defence Acquisition Council (DAC) chaired by Defence Minister Rajnath Singh gave clearance the deal on Wednesday.

The Light Combat Aircraft Tejas, indigenously-designed by Aircraft Development Agency (ADA) under the Defence Research and Development Organisation (DRDO) and manufactured by Hindustan Aeronautics Limited (HAL), is going to be the backbone of the Indian Air Force in future, the Defence Ministry said.

"While orders of 40 Tejas aircraft had been placed with HAL in initial configurations, the DAC paved the way for procurement of 83 of the more advanced Mk1A version of the aircraft from HAL by finalising the contractual and other issues. The proposal will now be placed for consideration of Cabinet Committee on Security (CCS)," a Defence Ministry statement said.

The additional jets will be a boost to Indian Air Force as its current fleet is down to 30 squadrons way below the sanctioned strength of 42. Each squadron comprises 18 fighter jets.

From the original plan of 40 Tejas Mark-1 to be inducted by 2016 only 16 fighter jets are in service till now.

The Tejas Mark-1A is an improved version of the earlier aircraft.

This procurement will be a major boost to 'Make in India' as the aircraft is indigenously designed, developed and manufactured with the participation of several local vendors apart from HAL, the Defence Ministry said.

The Defence Acquisition Council also accorded approval for the acquisition of indigenous Defence equipment for about ₹ 1,300 crore. The proposals were for procurement of Aerial Fuses and Twin-Dome Simulators for Hawk Mk32 aircraft for the Indian Air Force.

The DAC approved an amendment to the Defence Procurement Procedure (DPP) 2016 to enable review by a Costing Committee of bids submitted by Joint Ventures of Defence Public Sector Undertakings (DPSUs)/Ordnance Factory Board (OFB)/DRDO from whom procurement of Defence items is undertaken on a nomination basis. This will bring about more transparency in costs and compress the timelines for negotiation of the contract.