Eurocopter says it will establish a production facility in India to manufacture its AS550 C3 Fennec helicopters if it wins a contract to supply the helos to India’s army and air force.

The European company is vying with Russia’s Kamov 226 Sergei for an estimated $2 billion deal to supply 197 helicopters to the Indian defense forces. Of the 197 helos, the Army is likely to get 133 and the Air Force 64.

“We are waiting for the Indian government to open the commercial envelope ... We expect it to be opened in the first half of 2013 and we are confident that we have the best tool available,” Eurocopter CEO Lutz Bertling says on the sidelines of the Aero India show in Bengaluru.

“And if we win the contract it makes sense to set up a production facility here [in India], as these helos will be flown for the next 20 to 40 years and it’s important for the country to maintain them,” he says.

The assembly line could be established in mid-2014, he adds.

But Bertling says the proposed facility is not part of the request for proposals. “We believe it makes sense for both sides [to have a facility in India]. It will be a win-win situation. But it all depends on the numbers [i.e., the size of the deal]. Only if the deal is for over 50 helos [does it make] sense to have the facility here,” he says.

Eurocopter is already in discussions with partners to set up the assembly line, if it wins the contract.

Asked whether state-run Hindustan Aeronautics Limited (HAL) would be the partner, Bertling says, “We are talking to HAL as well ... So far we have a happy marriage [with HAL], so why divorce? We have a well functioning and long partnership and we are natural partners,” he says.

The facility aims to make 25 to 50 helicopters a year.

Asked how the trimming of India’s defense budget would affect future contracts in the country, he says, “We have zero indication that any request for proposals, which is out already, [would] be affected. We can imagine for future programs it would be bit of a stretch of delivery time.”

Eurocopter previously won a contract to sell 197 helicopters to India, but the deal fell through in 2007.