Apache-Chinook deal worth US$ 2.5bn to be inked by India soon


The government of India is likely to sign on the dotted line of a contract worth over US$ 2.5 billion for 22 Apache attack helicopters and 15 Chinook heavy-lift choppers with US aviation giant Boeing.

Defence sources have stated that the Defence Ministry cleared the offset conditions last week and now the deal will come up for discussion in the Cabinet Committee on Security.

The extended validity period of the price quoted by Boeing is ending this month.
Offset policy was first introduced as part of the Defence Procurement Procedure (DPP), 2005, under which a foreign company has to invest back a portion of the deal into India.
Usually 30 per cent of the value of a defence contract is earmarked under the offset clause in India.

Many in the defence sector had expected the deal to be signed during last week’s visit of US Defence Secretary Ashton Carter but officials made it clear that this was separate from the broader agendas that Carter had on the list during his visit.

Boeing, along with the US government, had extended the validity of the price quoted by them for another three months in April hoping to wrap up the deal soon.

Indian Defence Ministry had in March sought extension of the validity period on its expiry on March 31 after the US firm in February this year had indicated price hike if India failed to finalize the deal.

Aviation giant Boeing has so far extended the price validity for the deal at least thrice since cost negotiations concluded way back in 2013.

As per reports, the deal for the Apache is a “a hybrid one”, with one contract to be signed with Boeing for the helicopter and the other with the US government for its weapons, radars and electronic warfare mechanisms.