The prospects for India’s most promising defence export — the Dhruv Advanced Light Helicopter (ALH) — have just been dealt an unexpected blow. India’s Ministry of External Affairs (MEA) has turned down a Bolivian request for a line of credit to buy seven Dhruvs from Bangalore-based manufacturer Hindustan Aeronautics Limited (HAL).
Senior officials in India’s Ministry of Defence (MoD) are livid. India’s defence exports languish at about Rs 300-400 crore per year, barely 1 per cent of the Rs 30,000 crore spent annually on importing weaponry. The export of seven Dhruvs, each worth Rs 44 crore, would have effectively doubled defence exports.
MoD sources said the MEA turned down Bolivia’s request for a line of credit on the grounds that it was for military equipment. The MEA has not responded to an emailed questionnaire from Business Standard on the subject.
Dhruv ALHs, in fact, have civilian as well as military uses. Of five Dhruvs delivered to Ecuador this year, one was kitted out as a VIP transport for the Ecuadorian president. India has also supplied Dhruvs to Nepal and to Mauritius on easy credit, even as gifts.
Says a senior MoD official, “Frankly speaking, I was surprised by the MEA’s decision. I can only surmise that this decision was taken by someone at the lower level, without realising the implications on India’s defence exports.”
Bolivia barely registers on the MEA’s radar. That country does not have an embassy in New Delhi; an Honorary Consul represents India in La Paz, Bolivia’s capital.
But for the MoD, the sale of Dhruvs to Bolivia would be a vital step in cracking America’s domination of the South American helicopter market, which HAL was targeting aggressively. As more Dhruv ALHs flew in South American skies, HAL planned to set up major support infrastructure to pull in even more customers.
Five years ago, with the Chilean Air Force poised to buy the cheap and rugged Dhruv, Washington’s pressure allegedly forced Santiago to opt for US-made Bell helicopters. HAL bounced back by selling Ecuador five Dhruvs in 2008; Ecuador is reportedly considering a follow-up order. Chile, too, continues to watch with interest.
HAL’s Chairman and Managing Director, Ashok Nayak, refuses to talk about the MEA’s decision, but points out that HAL’s growing presence in South America will inevitably bring in more customers from that region.
Nayak explains, “We have already delivered the five Dhruv helicopters ordered by Ecuador. Our pilots are training the Ecuadorian Air Force; we have posted 15 HAL maintenance personnel in Ecuador for backup support, along with a substantial inventory of spares. We are steadily gaining experience in supporting the operations of Dhruv ALHs in South America. That is bound to pay off soon.
Helicopters are a vital part of the Bolivian Air Force, since anti-drug operations are its main focus. Without a single fixed-wing fighter aircraft, the Bolivian Air Force currently relies on the venerable American UH-1H Huey helicopter, which is approaching the end of its service life. With the Dhruv providing a state-of-the-art alternative at a price 25 per cent cheaper than its alternatives, Bolivia remains a potential buyer.
Tax experts say valuation of shares is a grey area and may lead to litigation
Economic growth numbers were revised on Friday to just below 5% and above 6% for 2012-13 and 2013-14, respectively, compared to sub-5% ...