Published by Global Banking and Finance Review
Posted on February 28, 2025
By Aditya Kalra, Shivam Patel and Tim Hepher
NEW DELHI/PARIS (Reuters) - India is in talks to purchase 10 more Airbus C-295 military transport aircraft than the 71 it had planned, as the country ramps up efforts to replace its ageing fleet with locally built planes, three people familiar with the matter told Reuters.
The discussions come as a boost for Airbus' partnership with Indian conglomerate Tata Group after they jointly opened an assembly line for the C-295 in the western state of Gujarat last year.
India's government in 2021 struck a $2.52 billion deal for 56 C-295 aircraft for the Air Force, and last year gave an initial nod for 15 more for its navy and coast guard. Now, talks are on to add up to 10 aircraft to the 2024 order, said the three sources, who declined to be named as the talks are private.
One source said the additional planes are for the Indian Air Force.
"The Indian Air Force has significant transport capability requirements; they need a lot of aircraft," said Laxman Behera, a defence expert at the Jawaharlal Nehru University in New Delhi.
Airbus and Tata Advanced Systems, which is running the project, declined to comment. India's defence ministry did not respond to a Reuters request for comment.
Going by the deal value of the 2021 purchase of 56 aircraft, an expanded order for 25 C-295s could be worth $1.1 billion.
India is the world's biggest arms importer but has been trying to boost domestic production and self reliance as it looks to counter neighbouring China's rapidly growing military.
The C-295 is a multi-role transport aircraft that can carry up to 70 troops or eight tonnes of cargo and can carry out missions such as airborne warning, surveillance and reconnaissance.
Airbus has said the Indian Air Force will soon become the largest C-295 operator, and that in India, all of the aircraft's structural components are being made locally.
AIR FORCE'S GROWING NEEDS
The source who said the expanded order was for the Air Force also said the Indian government is likely to place more orders for C-295s, while a separate industry source, familiar with the Ministry of Defence's thinking, said New Delhi wants up to 75 more C-295s, above the 56 ordered in 2021.
Sixteen C-295s from the 2021 order are due to come from Airbus' site in Spain while the remaining are expected to be assembled at the Airbus-Tata facility in India by 2031.
The new purchased C-295s could come solely from the Gujarat assembly line, but if New Delhi wants delivery faster, some may still need to come from Spain, the first source added.
The C-295 replaces India's legacy fleet of 56 Avro HS-748, which were first introduced in 1961 and formed the backbone of the Air Force's transport fleet.
The Indian Air Force chief this year criticised slow deliveries of fighter jets from state-run warplane maker Hindustan Aeronautics and has emphasised increasing production speed and called for opening up warplane manufacturing to private firms to boost competition.
(Reporting by Aditya Kalra, Shivam Patel and Tim Hepher; Additional reporting by Aditi Shah; Editing by Gerry Doyle)
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