Ministry of defence approves offset proposals for $11bn MMRCA tender

New Delhi: India's ministry of defence (MoD) cleared the way for opening the commercial bids of two shortlisted vendors in the multi-billion dollar, medium range multi-role combat aircraft (MMRCA) deal by approving their offset proposals in New Delhi. The French combat jet Rafale is competing with Eurofighter Typhoon for the contract.

Once bids are opened, the MoD will be able to determine the lowest bidder in the deal for 126 fighter aircraft and decide who will ultimately get the contract described as the 'mother of all deals'.

At a meeting chaired by defence minister AK Antony, the Defence Acquisition Council (DAC) cleared the offset evaluation report of Dassault Rafale and Eurofighter Typhoon, the two remaining contenders, MoD officials said in New Delhi.

"All the spade work for the opening of bids have been completed. Opening of the bids will be done in a few days in the presence of the two vendors," they said.

Under offset obligations, foreign defence vendors contracting deals worth over Rs300 crore are supposed to re-invest or source 30 per cent of the worth of the contract in the local industry. For the MMRCA contract these obligations have been set higher, at 50 per cent.

Officials clarified though no date had been specified for opening of bids it would happen soon.

The two-hour meeting was attended by the three service chiefs, the defence secretary, secretary, defence production, DG (acquisition) and concerned joint secretaries in the ministry as well as the defence minister.

Once evaluation of the bids is done at the MoD level, the proposal will then move to the ministry of finance for its approval and thereafter to the cabinet committee on security (CCS) for full and final clearance by the government.