March 04, 2013: Waiting in the wings for an urgent replacement are the IAF's vintage HS-748 Avro transports, built under license by HAL's transport division. The replacement of 56 aircraft is an ambitious procurement programme that hopes to see the creation of manufacturing capacity in the Indian private sector. At a cost of Rs 12,000 crore, it so far appears to be a European two-horse race. In terms of specifications, payload capacity and configuration, the only two aircraft available in the market now that fit the bill and meet the IAF's requirements in terms of a new-build new generation aircraft with modular architecture, are the Airbus C-295 and the Alenia Aermacchi C-27J Spartan, both high performance aircraft with proven track records and export sales.

The Antonov and Ilyushin companies, that function under Rosoboronexport, are understood to be interested in pitching their products as well, though it is understood that the IAF is keen to keep this programme non-Russian, since HAL already has a partnership for the 20-tonne payload mult-irole transport aircraft (MTA) with the United Aircraft Corporation of Russia. Sweden's Saab could also field the Saab 2000, though it remains to be seen if the requirement for 16 flyaway aircraft—as required by the air force—can be addressed with structurally refurbished, rewired aircraft.

In a recent statement, Airbus said, "Airbus Military has been selected as preferred bidder with the A330 MRTT aircraft and is promoting its very successful C295 transport aircraft in India for future competitions. Airbus Military also is the manufacturer of the A400M military transport aircraft, a heavy airlifter which on the long term could provide ideal capabilities for a country like India."

Alenia Aermacchi, in a statement, said, "The C-27J Spartan is the best seller in the new-generation medium battlefield airlifter’s category. The C-27J is a twin-engine turboprop tactical transport aircraft with state-of-the-art technology in avionics, propulsion and systems. It provides high performances, high cost effectiveness, extreme operating flexibility and it is the only aircraft of its class offering interoperability with heavier airlifters. The C-27J has been designed, developed and tested as a true military aircraft using military standards to produce a robust, safe and performing aircraft, and has obtained Military Qualification Certificate."

Unlike the C-130J and C-17 acquisitions, the Avro-replacement programme envisages the local license build of 40 aircraft by the private sector in an effort to build capacity, since HAL has a massive order book and further programmes could critically burden its on-schedule delivery capabilities. The programme, in that sense, could be a tipping point for the Indian private sector.