India Close To Conclude Tata Motors HMV Contract

The Indian Defense Ministry is close to finalizing a $160 million contract with a domestic company, Tata Motors for making heavy-duty military vehicles.

The deal for the supply of 1,239 Tata Motors-built six-wheel-drive high mobility vehicles (HMV), will be fitted with material handling cranes, has the option of a follow-on order for 600 more units, according to the Economic Times newspaper. The company is expecting the deal to be concluded soon.

In November 2013, Tata Motors was chosen among three other contenders—Vehicles Factory Jabalpur with Ashok Leyland, Force Motors with MAN SE and BEML with Tatra.

The Defense Ministry is also on the verge of concluding a $16 million contract to procure 100 multi-barrel rocket launchers, to replace the Grad BM21 truck-mounted rocket launchers. A consortium of Larsen and Toubro and Ashok Leyland are the final bidders selected last April, according to the report.

Tata Motors is participating in two other bids - a $64 million eight-wheel-drive high mobility trucks contract and a $12 million deal for the Field Artillery Tractor (FAT).

It is unlikely the acquisition contracts will be signed anytime soon, keeping in mind ministry’s revised decision on its defense budget. According to the report, ministry has moved capital expenditure valued $1.2 billion to revenue expenditure category.