22 AH-64E Apache helicopters in 2015 cost $2.1 billion, or Rs 14,910 crore, and six of these in 2020 cost Rs 6,600 crore.
In just five years, the cost of one helicopter jumped by 62 per cent.
Army will pay Rs 1,100 crore each for six iconic pure attack helicopters that come armed with the state-of-the-art weapon system and are a big boost to the military’s firepower.
If one does a basic calculation, then each IAF helicopter in 2015 cost approximately Rs 678 crore while the Army ones in 2020 cost about Rs 1,100 crore. This means that the six new helicopters cost about Rs 2,500 crore more. The price also includes the cost for the simulators, creation of infrastructure and performance-based logistics, which will also take care of spares, besides the training of the initial group of pilots. The difference in the cost is an important window into the silos that Indian armed forces operate in.
Former IAF chief N.A.K Browne had said that he could not allow “little air forces doing things of their own”.
To buy peace between the warring services, it was decided by then-UPA government that while the IAF will get the first 22 helicopters, the future purchase will go to the Army.
With the final clearances for both IAF and Army deals coming through during the Narendra Modi government, India ended up paying for two separate training process, infrastructure creation, spares, simulators, etc.
Had India decided to buy the helicopters in one go, the country could have bargained for a better deal overall since it is common sense that higher volumes bring down cost.