The Indian government has given foreign manufacturers an eight-week extension on a 3 March deadline for submitting detailed proposals for a fighter jet deal that is valued at a little more than $10 billion, or Rs39,800 crore, according to a senior official at the ministry of defence.
The extension came as a surprise to at least some of the manufacturers, who said their proposals were already completed, but neither a ministry spokesman nor the official, who asked not to be named, offered an explanation.
The plans to purchase the 126 fighter aircraft for the Indian Air Force have been in the works for almost a year and a half now, with long gaps between when the government first announced its intent to explore options to when it sent out requests for information, and then announced a date for when the proposals were due.
“It’s not a question of delaying the decision, but a question of thoroughly appraising the costs involved,” said the ministry official who is part of a team vetting the proposals.
As part of the Indian military’s plans to revamp almost all of its existing military hardware, the government will announce a new offset policy in April, which will probably include major changes in bidding by foreign manufacturers for Indian defence contracts, and how they will fulfil their obligations of sourcing between 30% and 50% of the value of the inputs locally.
The official, who said the six front-runners for the tender had been notified of the decision on Wednesday, suggested that it made more sense for the government to appraise the contracts after the new offset policies are announced. The manufacturers had a June deadline for making their final offset proposals.
US aircraft maker Boeing Co. said through a spokesperson on Thursday that its proposal for supply of Super Hornet planes was ready and it would submit it as per New Delhi’s requirement.
The ministry official also confirmed that more than 100 of the jets will have to be fully assembled in India under the current contract stipulation.