IAF May Get 83 New LCA Tejas Jets At A Significantly Lower Price As HAL Stares At A Depleting Order Book

With state defence manufacturer Hindustan Aeronautics Limited (HAL) staring at a depleting order book, the Indian Air Force (IAF) may benefit by being able to place an order for 83 Tejas Light Combat Aircraft (LCA) at a price which is significantly lower than the one initially quoted by HAL, Times of India has reported.

During recent negotiations HAL had quoted a price of Rs 450 crore per aircraft for the planned 83 aircraft bulk order. The IAF and Defence Ministry both considered this price to be unreasonable and set the ballpark at something below Rs 300. This price would exclude maintenance and other ancillary costs.

It was argued that Tejas loses its competitive edge to foreign aircraft like Saab’s Gripen which is priced below Rs 300 crore. HAL has also been asked to reduce its per aircraft delivery time from 2.5 lakh man hours to 1.5 lakh man hours.

As per the report, with the negotiations progressing nicely, the final figure is likely to be in the range of Rs 250 to Rs 275 crore. This would mean a saving of almost Rs 15,000 crore for the IAF which would otherwise have had to shell out Rs 37,350 crore under the Rs 450 crore per aircraft price.

The report claims that HAL may be forced to accept these terms as it currently only has pending orders worth Rs 45,000 crore and orders in its Nasik plant are expected to dry up by March 2020. The plant is currently manufacturing 12 Sukhoi Su-30 MKI jets.