Bengaluru: India is actively scouting for export potential for the indigenous Light Combat Aircraft (LCA) Tejas at a vanilla price of just Rs 309 crore per aircraft, as countries from Southeast Asia and the Middle East have evinced interest, R. Madhavan, chairman of Hindustan Aeronautics Limited (HAL), said at Aero India being held in Bengaluru.
Responding to a query from ThePrint on the export potential and the costing, Madhavan said while the contract cost for the 83 Tejas fighters is about Rs 48,000 crore, it will come down to around Rs 36,000 crore if one takes away the tax component and escalation in foreign exchange.
“Some are calculating the price of the Tejas MK1 A based on the Rs 48,000 (crore) bill. This is wrong. If one takes out the taxes and duty, besides foreign exchange increase, the cost of the contract comes down to about Rs 36,000 core. Actually, the total order cost for the 83 LCA is about Rs 25,150 crore,” he said.
Explaining the break-up, Madhavan said the taxes and customs work out to be around Rs 9,200 crore, and another Rs 11,000 crore is for spares, ground equipment, training aides and manuals, among others.
“Cost per aircraft is Rs 309 crore. The trainer will cost Rs 280 crore. This is a very competitive price. Other countries have found this cost and have realised that it is the cheapest offer for a four-and-a-half generation aircraft,” he said.
“This (Rs 309 crore) is the cost at which we will be exporting. There would be a little bit of extra cost because the bases will be abroad,” Madhavan added.
The main challenger for the Tejas Mark 1A, in terms of exports, is the joint Sino-Pak product, JF-17.
Defence officials, however, argued that the Tejas has superior performance since it has a better engine, radar system and electronic warfare suit, besides an edge in weaponry like the Beyond Visual Range missiles.
Refusing to name countries that have shown interest, Madhavan said they are from Southeast Asia and the Middle East.
Sources in the defence establishment, however, said half a dozen countries, including Sri Lanka and Egypt, have evinced interest in the aircraft.
Asked whether HAL has sought the government’s waiver on high taxes to enable exports, a senior HAL official said: “Most of the tax are output tax, which will not be applicable on exports.”
HAL is looking at setting up logistics facilities in Malaysia, Vietnam, Indonesia and Sri Lanka to woo the countries to buy Tejas and military helicopters.
This is because having logistics facilities is key to selling the products and ensuring after-sales services.
Prime Minister Narendra Modi had last year set a defence export target of $5 billion in the next five years.