Image: Shrey Chopra       

In a major boost to Hindustan Aeronautics Limited’s (HAL’s) revenues, the Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh approved on September 29 an Acceptance of Necessity (AoN) for the procurement of 25 Advanced Light Helicopters (ALH)-Mark-III from the Bangalore-headquartered defence public sector enterprise.

The helicopters will be procured at an approximate cost of ₹3,850 crore for the Indian Army’s Army Aviation Corps under the “Buy Indian-Indigenously Designed, Developed and Manufactured” (Buy Indian-IDDM) route.

The deal comes at a time when HAL is scrambling out of a financial quarter in which, thanks to the COVID-19 pandemic and severe disruptions in the company’s supply chain and raw material from original equipment manufacturers, the defence major’s production schedules and deliveries were badly hit.

During the last financial year, HAL had secured the largest-ever defence contract by an Indian entity when it received an order from the Ministry of Defence to manufacture 83 TEJAS MK-IA fighter aircraft in a deal worth roughly Rs.48,000 crore. In June, it was announced that the Coast Guard had inducted the first three of 16 ALH MK-IIIs designed and manufactured by HAL.

It was also announced that the DAC had accorded AoN for several capital acquisition proposals for the modernisation and operational needs of the Army, Navy and Air Force worth approximately ₹13,165 crore. Besides the ALHs, the list includes helicopters, guided munitions and rocket ammunition. Of these, procurements worth ₹11,486 crore (87 per cent) will be from domestic sources, officials from the Defence Ministry announced.

Again, under the Buy (Indian-IDDM) category and to give a fillip to the indigenous design, development and manufacture of ammunition, the DAC accorded an AoN for the procurement of terminally guided munition and HEPF/RHE (high-energy) rocket ammunition worth an approximate ₹4,962 crore from domestic sources.

The DAC’s approval for the these programs will benefit several tier 1/2/3 indigenous manufacturing and supply companies including Alpha Design Technologies, Data Pattern, Samtel, and so on, who will be producing some of the subsystems for the ALH and other programs.

The DAC also approved a few amendments to the Defence Acquisition Procedure (DAP) 2020 as a part of business process re-engineering to ensure easing of doing business for the industry and measures to enhance procurement efficiency and reduce the timelines, the Defence Ministry statement added.