India scraps $1-billion military helicopter tender

India has cancelled a tender for 22 attack helicopters as the three firms vying for the $1-billion deal have failed to meet the requirements of the Indian Air Force, a development that could further delay its modernisation plans.

The contenders for the deal included Eurocopter,  a unit of Franco-German consortium EADS; AgustaWestland, which is a unit of Italian defence group Finmeccanica and Moscow's state arms agency Rosoboronexport, bidding on behalf of Russian manufacturer Mil.

European aerospace group EADS said the request for the proposal has been cancelled. But it did not give any reason for the scrapping of the defence purchase tender.

The company has been ''informed" of the decision to cancel the tender last week, Yves Guillaume, chief executive of EADS's Indian subsidiary, told reporters.

EADS, which owns Eurocopter, the world's largest civil helicopter maker and a major supplier of military helicopters such as the Tiger, had hoped to clinch the deal worth around $1 billion.

India, which currently relies on an ageing fleet of Russian MI-25 and MI-35 helicopter gunships designed by Russia's Mil, plans to overhaul and replace its fleet amid growing security risks in the region.

Last year, India sought bids for new attack helicopters designed to assault targets on the ground operating at high altitudes, from seven international firms.

While US companies Boeing and Bell, a unit of Textron, had quit the field, Europter, Westland and Mil remained in the race.

India had, in 2007, scrapped advanced talks with Eurocopter for acquiring 197 lightweight Fennec military helicopters worth $600 million after complaints about the bidding process.

The defence ministry is expected to float fresh tenders for procuring the advanced attack helicopters.

Eurocopter, the world's leading helicopter manufacturer, meanwhile, said it fully met its 2008 objectives for helicopter sales and deliveries and increased its turnover by 7.5 per cent. Eurocopter remained the world's No 1 manufacturer of civil and parapublic helicopters with a total of 588 helicopter deliveries for new military and civil helicopters in 2008.