Indian Navy trims acquisition list due to Budget cuts.
With budget cuts hitting hard, the Navy is pulling back on procurement of combat systems, cutting down on the numbers planned to be acquired in some cases and foreclosing other projects that have hit a dead end.
The rationalisation process, which is likely to be approved by the defence ministry, has been initiated after consecutive budgets where projected demands of the Navy have not been met. In the current budget, for example, the Navy was allocated Rs 41,259 crore against the projected amount of Rs 64,307 crore, which officials say is not even adequate to continue annual payments for acquisition contracts already signed.
Sources told ET the Navy is cutting down the number of Mine Counter Measure Vessels (MCMVs) it wanted to acquire from the original 12 warships to eight. The contract, given on nomination to the Goa Shipyard Limited, was originally pegged at Rs 32,000 crore which will now be brought down.
Similarly, it is planning to cut down the acquisition of Kamov KA 31 early warning helicopters to six, from 10. These choppers are deployed from large combatants such as the aircraft carrier to significantly increase the detection range for incoming enemy units.
The project was originally pegged at Rs 3,600 crore. In November, the Navy had cut down the number of P8 I reconnaissance it requires from the US under a Foreign Military Sales pact to 6 (10). The original contract was pegged at Rs 21,000 cr, which would be cut after the rationalisation process.