India's defence acquisition council has approved a tender for up to 384 military helicopters, paving the way for the release of a request for proposals in the next month.

The council, which is headed by the defence minister and includes the service chiefs, has allowed the air force and army to submit a joint bid. This will help speed up an urgent replacement exercise that is almost two years behind schedule after an earlier tender was cancelled.

AgustaWestland, Bell Helicopters, Eurocopter and Kamov are the likely recipients of the RFP, and they will be given three months to respond. Their bids are valid for 18 months after submission, but the defence ministry can extend that if needed. If India keeps to the schedule, the first helicopter is likely to be in service in 2011 at the earliest.

The total value of the contract could reach $1.5 billion, say industry sources in New Delhi. Under Indian offset rules, 30% of the contract's value must be reinvested in the country. The army will get 259 helicopters and the air force 125. Of these, 197 would be bought in fly-away condition and 187 licence-produced by Hindustan Aeronautics.

Both services need the aircraft to replace their fleet of HAL Chetak and Cheetah helicopters, many of which were first inducted in the 1960s. The army alone is reported to have lost 11 of the aircraft - which are used mainly for transport, evacuation and reconnaissance tasks - since 1999.

The Eurocopter AS550 Fennec was close to being selected in an earlier competition for 197 army helicopters, but the defence ministry cancelled the tender in December due to allegations of irregularities in the bidding process. The company had apparently used a civilian version of the helicopter during the 2005 flight trials, and an official in its Indian agency was related to a senior member of the selection committee - leading to accusations of a possible conflict of interest. Bell and the US government had also claimed that the Bell 407 was unfairly disqualified. Eurocopter has denied all allegations of impropriety.