The Defence Ministry’s “model” tender document to procure 126 new fighters for the Indian Air Force (IAF) has stumped global aviation companies, who are finding it difficult to understand the complex offset regulations and technical requirements of the contract.At the first formal meeting between manufacturers and ministry officials, after the estimated $10 billion tender was issued in August, at least three of the six contenders have requested for a time extension of six months to submit their bids due to a “lack of clarity” in the document. The offset rule, which mandates manufacturers to invest 50 per cent of the contract money into Indian defence production sector, is the primary reason for confusion.Sources said that at least three bidders — Boeing (F/A 18 Super Hornet), Lockheed Martin (F-16) and MiG Corporation (MiG 35)—- have requested for an extension in the deadline to submit bids. As per the rules, all contenders have to put in their technical bids, commercial bids and offset plan by March next year.The clarification meet, which was held on Monday and was chaired by Air Marshal NAK Browne, Deputy Chief of Air Staff, failed to clear the air. For further clarifications, representatives from all six companies moved to Bangalore on Thursday to meet senior Hindustan Aeronautics Limited (HAL) officials.However, Defence Ministry sources said the 211-page tender document is “very clear”. “There is still time to go before the March deadline (to submit bids). All doubts will be sorted out,” the Ministry spokesperson said.While the manufacturers are unwilling to come on record, sources said it is unclear whether cost incurred during Transfer of Technology (ToT) will be treated as fulfilling the offset responsibility. The global players are also not clear whether manufacturing units, set up with Indian partners to meet the offset clause, will be allowed to export their products to a third country.Aviation companies are also unclear whether banking or accumulation of offset credits for use at a later stage will be allowed for the contract as it involves a huge amount of money to be invested in the domestic market.After a six-year-deal, the Defence Ministry issued the country’s largest-ever global tender to acquire medium multi-role combat aircraft in August. The selected aircraft, which are replacements for the MiG 21 fighters, are likely to remain in service for over 40 years.
