India’s cabinet on Tuesday cleared the purchase of Boeing’s Apache and Chinook helicopters in a deal worth around $2.5 billion, two government sources said, in a boost to defence ties with the United States.
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India will buy 22 Apache attack helicopters and 15 Chinooks to replace ageing Soviet-era aircraft.
Apache deal is a hybrid one, as one deal to be signed with Boeing for the choppers and the other with the US government for its radars, weapons and electronic warfare suites.
India’s finance ministry gave its blessing for the deal last week and the country’s cabinet committee on security approved the transaction Tuesday, Reuters reported.
Experts in defence sector had expected the deal, to be valued over $2.5 billion and since 2013 pending following finalisation of cost agreement, was signed during the visit of U.S. Defence Secretary Ashton Carter in June 2015.
Boeing kept the price of the helicopters stable, despite inflation, extending it over deadlines more than 10 times, said the industry source, who declined to be identified because of the sensitivity of the subject.
The deal comes as Modi heads this week to New York, where he hopes to meet US President Barack Obama ahead of the United Nations General Assembly.
The contract will have clauses to place follow-on orders for 11 more Apaches and four extra Chinooks.
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Separately, the Indian Army has sought a fleet of at least 39 of these attack helicopters, some of which it wants to deploy as part of a new mountain division it is raising along the disputed border with China, according to sources. This state-of-the-art attack helicopter will be acquired with Hell Fire missiles and around 8,000 rockets.
