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June 1, 2011

CCS to discuss defence deal with US

(PTI) The Cabinet Committee on Security (CCS) will discuss country's largest ever defence deal with the US for inducting 10 C-17 heavy-lift aircraft in its meeting expected to be held tomorrow. The USD 4.1 billion deal will be put up before the CCS for discussion, sources said here. The proposed deal through the Foreign Military Sales (FMS) route has been hanging fire for long with India seeking several clarifications from the manufacturer Boeing. The proposal to be considered by CCS would include offsets proposals worth 30 per cent of the total value of the deal and setting up of defence facilities in the country, they added.Under the procurement procedure, offsets clause entails that a vendor winning a defence deal worth over Rs 300 crore has to reinvest at least 30 per cent of the worth of the deal back in Indian defence, homeland security or civilian aerospace sectors. Defence Ministry has already approved funds for procuring the aircraft in this fiscal, the sources added. Boeing, along with another US company Lockheed Martin, recently failed to qualify in the bid for 126 Medium Multi-Role Combat Aircraft (MMRCA) which IAF is acquiring.India is planning to procure the aircraft for augmenting its fleet which now comprises Russian-made transport aircraft Ilyushin-76 and Antonov-32. After finalising the initial deal for ten aircraft, the IAF is also planning to place orders for additional six aircraft.


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