India clears $2.4 bn plan to buy cargo planes for IAF

New Delhi, July 23 (IANS) India's defence ministry Monday gave its nod for an Indian Air Force (IAF) plan to buy 56 transport planes worth $2.4 billion to augment its cargo fleet, apart from tweaking its defence procurement offsets policy and creating a new agency to execute the same.

The Defence Acquisition Council (DAC), headed by Defence Minister A.K. Antony, met here to clear the proposals, ministry sources said here.

The 56 transport planes are required by the IAF in place of its ageing Avro planes fleet and the defence ministry will issue a global tender for procuring the same,they said, adding that only the first 16 planes under the deal will be directly procured from the vendor.

The deal winner will have to tie-up with an Indian private or a public sector firm to acquire components for manufacturing the rest 40 planes.

The DAC also cleared the creation of the Defence Offsets Management Agency (DOMA) in place of the existing Defence Offsets Facilitation Agency (DOFA). The new agency will now be under the defence production department, they said.

Among the new offsets policy guidelines approved included transfer of technology and critical technologies as eligible defence offsets, a policy under which any foreign firm winning an Indian defence contract worth over $60 million will have to plough back a minimum of 30 percent of the deal back in Indian defence, aerospace and homeland security industries and training.