Five years ago, the Indian Army’s entire helicopter fleet was essentially obsolete. In particular, its 350-odd Cheetahs and Chetaks were variants of the Allouette III model, first designed by Aerospatiale in the late 1950s, last produced in France in the early 1980s, and retired by the French military in 2004. In fact, the only country still producing the Allouette under licence is India, via Hindustan Aeronautics Limited (HAL), one of India’s state-run defence manufacturers.

But as India increasingly expressed its desire to build its own weaponry, HAL developed the Dhruv advanced light helicopter to replace the Allouette. Development was initiated around the time that France shut down new Allouette production, and the first Dhruv prototype flew in 1992.

“Five years ago, the Indian Army’s entire helicopter fleet was essentially obsolete.”

By that time, however, fallout from the Bofors artillery corruption scandal had paralysed Indian military procurement, which remained frozen until after the 1999 Kargil war, which exposed serious operational deficiencies that stemmed from the freeze. In 2002, the first Dhruvs entered operational service.


Ironically, the decade-long hiatus may have been a blessing in disguise for the Dhruv and HAL. The prolonged development period may have exhausted even the Indian military’s penchant for testing weapons into the ground and then layering on requirements, as the military was not in a position to make demands in the absence of an order.

Equally important for a first-time process, HAL had the opportunity to work out design and production problems without the need to meet an actual delivery deadline; this experience was helpful when subsequent vibration problems emerged during initial field operations.

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HAL’s chairman, Ashok Bajewa, states that ‘the ALH today is different from when it was introduced in 2002’, because HAL acted on feedback from the services to an unprecedented degree (by historical Indian public-sector standards).

The Indian defence infrastructure and the Dhruv itself may have benefited from the delay in other respects. HAL originally wanted to use the LHTEC-800 engine, which was a primarily American engine slated for the USAF’s Comanche programme.

After India’s 1998 nuclear tests, however, the US included this engine in its sanctions on military sales to India, which led HAL to obtain a somewhat less powerful but otherwise unencumbered engine from Turbomeca, part of a French industrial conglomerate that, probably not coincidentally, had worked extensively with Aerospatiale. Ultimately, HAL has partnered with Turbomeca to develop and produce a follow-on turbine, the Shakti (known as the Ardiden H1 in France).


Finally, and perhaps most critically from a procurement viewpoint, HAL built the Dhruv platform to be interoperable across all three military services. Although the three services have in the past employed systems with some commonality, standardisation, where practicable, has been mandated by the MoD to save both money and time.

“The Fennec is almost half the cost of the Dhruv, which costs $5.1m per unit.”

Evidently, HAL and the MoD understand the value of large production runs in maximising learning curve efficiencies and the utility of standardised systems in curbing logistics chaos, which have historically plagued India’s defence establishment. Moreover, the cross-service requirement probably had the paradoxical effect of keeping each individual service from going overboard with its own wish list.

Certainly, India’s army seems happy with the Dhruv. With roughly 30 units currently in the field, the army will induct 40 more utility-version Dhruvs starting in 2008. Army chief of staff Gen. JJ Singh stated in August, “having flown in other helicopters, I think Dhruv is as good as we can get.”

Singh, who flew in the Dhruv during its initial field baptism in 2002, has also praised HAL for rectifying the vibration problem, and accurately characterised earlier operating shortcomings as ‘teething problems’ that almost always accompany a first production model (especially when that model is the first-ever crack at producing a given type of weapon).

Ultimately, HAL is slated to deliver 120 Dhruvs to the Indian Army and 300 units to the Indian military collectively. Moreover, HAL is managing the entire process of weaponising the Dhruv by integrating weapons and electronics systems.

This not only will give HAL exposure to the whole range of experience that characterises global players such as Boeing, EADS and MiG, but will also make the Dhruv more attractive to other emerging militaries seeking to modernise. HAL has already teamed with Israel Aircraft Industries to offer the Dhruv for export with IAI’s Lahav avionics suite.


In April, the Indian Army made a bigger splash in trade journal headlines when it chose Eurocopter’s Fennec as its next-generation light helicopter. Under the terms of the deal, valued at roughly $550m, the army will obtain just under 200 helicopters (not including weapons and avionics).

“HAL built the Dhruv platform to be interoperable across all three military services.”

Now, given that the Indian Army knew that it had an effective system in the Dhruv, why did it contract for the Fennec in the first place?

Both helicopters are classified as multi-role light helicopters, but the Dhruv is about twice as heavy and correspondingly more versatile in terms of cargo and payload weight. Moreover, the Dhruv is domestically developed, and an all-Dhruv light helicopter line would seem to maximise standardisation efficiencies.

One reason could have been acquisition cost; at roughly $2.8m per unit, the Fennec is almost half the cost of the Dhruv, which costs $5.1m per unit on the first operational batch. Proportional to capacity, however, both machines are roughly equivalent. Furthermore, static capital cost comparisons are inevitably misleading because scale and learning curve efficiencies are not perfectly linear.

A more compelling factor may have been the desire for diversification. Having a back-up is especially prudent when trying something for the first time, and given its strategic situation, India can be forgiven for erring on the side of conservatism in national security affairs.

Perhaps most important, however, is that India’s strategic ambitions require shorter-term operational efficiencies to be balanced against longer-term economic and political considerations. If nothing else, India could not strike technology transfer and production partnership deals if it were not willing to give foreign defence firms a piece of the domestic pie.

Moreover, EADS and India certainly have a strong commercial relationship with deep historical roots:

  • EADS, the corporate parent of Eurocopter, sprung from the merger of well-known German and Spanish aerospace businesses with Aerospatiale-Matra; recall that the former entity is essentially the incumbent exporter of military helicopters to India
  • EADS builds the Ariane rockets sometimes used by the Indian Space Research Organisation (ISRO) for its satellite launches
  • The relationship runs both ways, as HAL supplies doors and other fuselage parts to Airbus, which is an EADS company

Perhaps most significantly in this respect, HAL and EADS have an agreement to co-develop components and systems. Indeed, EADS had already supplied parts for the Dhruv before competition for the order began.

“In 2002, the first Dhruvs entered operational service.”

Despite these pre-existing relationships, the order was hotly contested, as it was justifiably viewed as a springboard into additional aviation orders.

Aside from Eurocopter, contestants included Italy’s Agusta, Russia’s Kamov and Kazan, and Bell Helicopter from the US.

In the final round, the Bell 407 lost out to the Fennec. Although the deciding trials featured the ability to operate in extreme, and extremely different, jungle and Himalayan environments, Bell can be forgiven for wondering about the lingering effect of the 1998 US sanctions relative to the longstanding Franco-Indian aerospace ties.


Given its expanding strategic and operational requirements, the Indian Army’s most pressing need is for medium- and heavy-lift helicopters, which were conspicuously absent from India’s first-generation line-up. Not surprisingly, therefore, the Indian Air Force placed a follow-on order in 2006 for 80 Mi-17 medium-lift helicopters from Russia, which is India’s incumbent supplier in a broader sense given that over two-thirds of India’s current weapons are of Soviet origin.

Even so, the upper weight classes are still open, and a number of companies are more than willing to step up. In particular, EADS CEO Lutz Bertling said during a recent visit to India that EADS was ready to collaborate (presumably with HAL) to produce an indigenous medium-lift helicopter in India.

However, the logic of incumbency is less powerful when crossing into different classes, and even more significantly, the Indian military is unlikely to go about the task of being an independent global power by giving Eurocopter as much penetration as the Soviets formerly had.

“Upper weight classes are still open, and companies are more than willing to step up.”

In aggregate, according to a Bell Helicopter survey, the Indian helicopter market will be worth roughly $4bn over the next few years.

Assuming that the 300-unit Dhruv order stays constant, it would be worth $1.5bn, and if Eurocopter were to leverage the Army order into a tri-service procurement deal, which could be worth up to $2bn, only $500m would be up for grabs.

Under this scenario, Eurocopter is unlikely to take both light-helicopter follow-on orders and heavier-lift collaboration projects. More likely is that India will institute an implicit policy of different vendors (perhaps from different countries) for different weight classes.