The government of India announced on Monday that it has signed a contract with U.S. aerospace firm Boeing to buy 15 Chinook heavylift helicopters and 22 Apache multi-role attack helicopters. The announcement was made via Twitter by Indian Defence ministry spokesman Sitanshu Kar in New Delhi on Monday.
Less than a day before Indian PM Narendra Modi left for the United States on Tuesday morning, the Union government approved the two defense deals between the superpowers.
ValueWalk's Raul Panganiban interviews JP Lee, Product Managers at VanEck, and discusses the video gaming industry. Q4 2020 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview With VanEck's JP Lee ValueWalk's ValueTalks ·
The new military contract signed this week guarantees that the U.S. will be among the biggest military suppliers for the Indian military for at least the next several years.
Analysts also point out that the military helicopter deal will also be a big step forward for the the Indian private sector in its early efforts to develop a full scale aerospace industry in India.
An Indian official with knowledge of the deal said the contracts for the Apache combat helicopters had two components: a foreign military sales (FMS) agreement between the two countries and a direct commercial sale contract with Boeing.
Details on new U.S. – India military helicopter deal
According to the source, the total value of the deal for both helicopters is close to $3 billion.
As mentioned above, the purchase of the Apaches was signed separately as a “foreign military sale” purchase by the Indian defense ministry, which signed a “letter of agreement” with the Pentagon. The FMS sale includes munitions, training, aircraft certification, and specific technical components such as engines, electro-optical sensors and the radar.
Based on the contract, Boeing will begin delivery of the Chinook and Apache helicopters three years from Monday. The entire delivery is to be completed in 48 months from the date of the contract.
All helicopters are to be delivered in fly-away condition so they will be ready for immediate operations. Of note, Boeing agreed to a 30% offset liability, so it is likely that some parts of the aircraft will be built in India.
Indian firms are already a part of the Chinook supply chain. Dynamatics Technologies of Bangalore manufactures the aft pylon and cargo ramps for all Chinooks globally.
Apparently additional vendors based in India are being vetted to produce other components for the military helicopters. The new deal maintains the U.S. as India’s second-biggest arms supplier, behind only long-term arms supplier Russia.
Of note, Indian defense officials also noted the contract includes a clause for follow-on orders for four additional Chinooks and 11 more Apaches in the future.
More on the Chinook and Apache helicopters
The Chinook first served in the Vietnam War, but has evolved in design to become a heavy lift helicopter of global repute. These huge helicopters can undersling and lift a 155 millimeter artillery piece to support infantry, even in high altitudes of up to 15,000 feet.
Military analysts highlight that the Apache AH-64E is a top flight, modern attack helicopter. It comes equipped with with anti-tank missiles, rockets and a chain gun that fires 625 rounds per minute designed to penetrate most armored vehicles. The Apache choppers first saw combat in Panama, and direct precursors to the current Apache have undertaken close to a million mission hours starting in the First Gulf War in 1991.