Airbus A330 Multi Role Tanker Transport (MRTT)

High costs and pending inquiries against Airbus forced India to abort a 2 billion dollar deal with Airbus. This was the second MRTT aircraft global tender to be cancelled by the Ministry of Defense since 2006. In July 2016 India terminated the a 2 billion dollar contract for six multi-role tanker transport (MRTT) aircraft with Airbus Defense and Space. This came as no surprise for observers as the deal was troubled by objections over its high costs. Many officials were also skeptical considering protracted inquiries against the European consortium in India dating back to the 1970s.

"We have been notified by the MoD of the withdrawal of the request for proposals (RfP), but we do not see this as the end of the road for the A330 MRTT campaign in India," an Airbus official told IHS Jane's on 26 July 2016, adding that the aerospace company "will engage with the Indian government in finding a way to bring the A330 MRTT's capabilities to the IAF".

India's Ministry of Defense had shortlisted six Airbus A330 MRTT for the Indian Air Force following a RFP issued six years ago. The defense ministry selected the Airbus A330 platforms over the Russian Ilyushin IL-78 aircraft in July 2012 to be operated by the Indian air force for the next 25 years. India selected Airbus Military as the country’s preferred bidder to supply A330 MRTT Multi Role Tanker Transport aircraft, following a selection process that included the refuelling of multiple Indian Air Force fighter types and operations from the high-altitude base at Leh. Detailed negotiations were expected to conclude with a final production contract in 2013 for an envisaged six aircraft. This selection made India the fifth nation committing to the A330 MRTT, following Australia, Saudi Arabia, the United Arab Emirates and the United Kingdom – which together had ordered a total of 28 aircraft.

According to highly placed sources, the Finance Ministry was of the opinion that the aircraft were too expensive and asked the Defense Ministry to look for cheaper options. A new RFP was released, following which the budget was increased to $2 billion and included lifecycle costs in the price arguing that the Airbus plane would work out cheaper in the long term over its Russian competitor if lifecycle costs were to be considered.

Meanwhile, a Member of Parliament wrote to the Defense Ministry against the deal, as a result of which the case was sent to the Law Ministry for an opinion. In April 2015, the Government referred the deal to the Defense Ministry's Vigilance Department for clearance after ascertaining the status of the old cases against the consortium. However, it was found that only one such case against the consortium had been closed due to lack of evidence and that the other inquiries were pending.

TASS quoted a source as saying: “We are planning to consider the option of Il-78M-90A or Il-78M2 acquisition. These planes are supposed to have the best cost-effectiveness ratio. The Indian Air Force (IAF) operates several Il-78MKI tankers delivered in 2003-2006 that could be upgraded to the Il-78M2 level". Sources say a contract for Russian Ilyusin-78 (IL-78) aircraft is likely to be signed by October of this year. According to sources, India is now considering procurement of the four-engine Russian Ilyusin-78 aircraft which was rejected in favor of the two-engine Airbus-330 MRTT. Highly placed sources said the Ministry of Defense is likely to sign a contract with the Russian company by the end of October this year, under which upgrades of already operating Il-78MKI will be included as well.

The Indian Air Force (IAF) already operated several Il-78MKI tankers delivered in 2003-2006. Sources said that six Il-78MKI will be upgraded to the Il-78MKI-90 MRTT standard while another Il-76MD transport aircraft will be converted into an Il-78MKI-90. The Ministry of Defense also wants to upgrade Il-76MDs to the Il-76MD-90 standard, which is likely to be part of the yet to be signed contract.

However, the Russian option will be reviewed on a regular basis. "The MoD is re-launching the tender in order to supply the IAF with the state-of-the-art aerial tankers, not to acquire Russian aircraft," he said.