Though the Defence Ministry has approved a Rs 2,820-crore proposal to provide night vision devices to the Army, the Government has deferred a deal to buy 197 light utility helicopters pending an investigation into kickback allegations.

A previous tender to buy 197 helicopters to replace the ageing Cheetah and Chetak fleet of the Army, for nearly Rs 3,000 crore, was to be debated by the ministry, said people close to the development. However, the Defence Acquisition Council (DAC) has decided to re-examine the proposal from the Army to buy the helicopters, the sources added.

At a meeting of the DAC, chaired by Defence Minister A.K. Antony recently, the purchase of 4,000 thermal imaging sights for T-72 and T-90 tanks and armoured personnel vehicles worth Rs 3,000 crore was cleared.

The thermal imagers are produced by government-owned Bharat Electronics Ltd (BEL) in association with Israel.

The DAC also gave its nod to upgrade the existing inventory of M-46 130 mm artillery guns to 155 mm guns. This could translate into an Rs 15,000 crore opportunity over the next five years, analysts have said. A research note from Edelweiss Financial notes that the procurement of 5,000 TI sights from BEL translates into an order value of Rs 2,800 crore for the company, and forms around 30 per cent of its total estimated FY14 order intake.

It is proposed to buy 2,000 pieces of TI sights at Rs 1,000 crore for T-72 Tanks, 1,200 pieces at Rs 960 crore for T-90 Tanks and 1,780 pieces at Rs 860 crore for BMP Infantry Combat Vehicles, the note added.

Analysts have added that BEL has not won any big ticket order recently and the deal would be a shot in the arm for the company. With the Government planning to boost capital spending on Defence to 24 per cent year-on-year in its FY14 budget, the move augurs well for BEL, they said.