The tactical communication system, first announced in May 2009, will be the foundation of the Indian army's communication network and is expected to cost around $2.2 billion.

The system will be a robust, snoop-proof, mobile, cellular network for the Indian army's voice and data communications during battle, the defense department said. It will allow integrated communication, from battlefield to command headquarters and include everything from cellular telephones to equipment sensors.

By seeking domestic design and manufacture of the system, the government is seeking to better integrate and improve the competitiveness of the private indigenous IT sector into defense production.

Few details of the expression of interest have been released because of security concerns by the army. However, documents were sent to five private companies and three public sector businesses for developing the tactical communications system, army communications chief Lt. Gen. P. Mohapatra said.

The competition will be between the prototypes of two companies selected by the army that will pay for 80 percent of their development costs.

The private companies concerned are Tata Power's Strategic Electronics Division, HCL Infosystems, Wipro Technologies, Rolta India and L&T.

Another major Indian player in the IT sector is Tech Mahindra but the company wasn't included. It fails to qualify as an Indian company because of a foreign holding higher than 26 percent, a report in the Business Standard said. Tech Mahindra is a joint operation formed in 1986 between Mahindra & Mahindra and British telecommunications giant BT.

Last year Tech Mahindra acquired Indian IT business Satyam, a move that increased its market share within the indigenous IT manufacturing sector. Its clients are in banking and financial services, manufacturing, energy and utilities.

Three public sector organizations were sent expressions of interest -- Bharat Electronics, Electronics Corporation of India and ITI.

The Business Standard also reported there was intense debate among army acquisition officials about going public with the development of the system because of security concerns. Some officials wanted Bharat Electronics to head up the project without going to tender.

The companies and public businesses have two months to return their documents, which should include details of their proposed consortia which will become the development agency for the project.

Indigenous manufacture of the system is important for the army. The expression of interest states that "the contribution of the Indian industry in acquiring and developing technologies in critical areas shall be a key criterion in assessment of various proposals."

However, it is expected that not all components will be India-made but it could reach up to 80 percent, one company said.

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