GOVERNMENT OF INDIA
Ministry of Defence
DEPARTMENT OF DEFENCE

RAJYA SABHA
UNSTARRED QUESTION NO.3133
TO BE ANSWERED ON 8.12.2010
High Purchase Price of C-130 Jets VIS-A-VIS CANADA

3133. SHRI RAJEEV CHANDRASEKHAR:

Will the Minister of DEFENCE be pleased to state:

(a)     whether it is a fact that Government paid 1 billion dollars for 6 C-130 Jets for IAF whereas Canada paid 1.4 billion dollars for 17 C-130 Jets to the same manufacturer;

(b)    if so, the details thereof;

(c)     what are the reasons that our price is cent per cent more than Canada and yet our country gets only 37 per cent of the offset Canada have managed; and

(d)    the action Government proposes to take in this regard?

ANSWER
MINISTER OF DEFENCE
(SHRI A.K. ANTONY)

(a) & (b): Six C-130J-30 aircraft have been purchased from the Government of United States of America (USG) through the Foreign Military Sales (FMS) route at a cost of US $ 962 million which includes the cost on account of training, role and support equipment, spares, warranty and US Government administrative charges. In the absence of official information regarding the cost of the Canadian procurement, it is not possible to make appropriate comparative cost analysis.

(c) & (d): In accordance with the Defence Procurement Procedure, the Letter of Request (LOR) stipulated an offset obligation of not less than 30% of the estimated amount. The OEM has undertaken to fulfill the stipulated offset obligation.