SOURCE: RAUNAK KUNDE / NEWS BEAT / IDRW.ORG
After India was seen dragging its feet over the purchase of 20 BAE Hawk trainers for IAF due to an inflated price of the jets. BAE Systems and UK Government have offered India a line of funding to land estimated Rs 2500 crores worth contract.
According to information provided to idrw.org, UK Export Finance provides loan up to £3 Billion to any overseas buyers to procure defense equipment from UK based Defense firms. UK Government and BAE Systems want India to take the offer to fund the purchase of 20 Hawks.
Negotiation has been stuck for past three years due to the initial price offered by the vendors including the public sector Hindustan Aeronautics Limited (HAL) was close to Rs 200 crore per unit while over 120 Hawk planes that were inducted into service after a deal with Britain in 2004 were bought at Rs 90 crore per unit. After hectic negotiations, the price was brought down to around Rs 150 crore per unit but Ministry of Defence was certainly not interested.
IAF wanted to purchase 20 BAE Systems Hawk Mk.132 aircraft for the Surya Kiran Aerobatic Team fitted with smoke canisters and dedicated only to perform aerobatics display role. 9 Hawk Aircraft Surya Kiran Aerobatic Team already has been resurrected from the Hawk MK 132 aircraft fleet.
Line of Credit
Indian Government has never brought defense equipment on credit lines or ever has accepted defense aid from foreign countries. All the defense equipment are usually brought from its own budget. The government of India is likely to reject this offer and allow BAE Systems to come up with a better price or face losing the order since HAL already has completed production of the Hawk trainers in India and production facility and engineers gradually will be allocated for other purposes.
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