1. Indian partner for $1.6-bn Japan aircraft deal to be selected soon

Indian partner for $1.6-bn Japan aircraft deal to be selected soon

US-2 project to be implemented jointly with Japan’s ShinMaywa

By: | New Delhi | Published: December 2, 2015 12:55 AM

The private-sector partner from India for the $1.6-billion US-2 amphibious aircraft project in collaboration with Japan’s ShinMaywa Industries will be selected soon. An announcement in this regard is expected during Japanese Prime Minister Shinzo Abe’s visit to the country in December.

The Japanese company will provide all technical support to the Indian partner for re-export of the planes.

Industry sources, on condition of anonymity, told FE that “The planes have to be acquired under the ‘Buy and Make (global)’ category of the Defence Procurement Procedure 2013… The company has shortlisted Pipavav Defence and Offshore Engineering Company Ltd.”

The final agreement is likely to be inked when the Japanese leader will meet his counter part Prime minister Narendra Modi for the India-Japan summit meet in New Delhi.

ShinMaywa, which is also considering building a factory in India for maintenance, has been in hectic talks with several companies including state owned Hindustan Aeronautics,  private companies like Tata Aerospace, Taneja Aerospace & Aviation Ltd (TAAL), Mahindra Group, L&T, Pipavav Defence and Offshore Engineering Company (before Reliance bought shares).

Sources have indicated the acquisition process has been put on the fast track, as this is a deal which has been cleared at the highest political level. In the last few months, there have been a lot of exchanges between the Indian Navy and executives of ShinMaywa.

Anil Ambani’s Reliance Defence Systems, along with Reliance Infrastructure, has acquired a 44% stake in Pipavav Defence and Offshore Engineering Company to manufacture warships, submarines and even aircraft carriers in India, along with civil application structures like oil rigs and platforms.

The talks for 12 ShinMaywa US-2 short take-off and landing (STOL) search-and-rescue (SARs) amphibian planes for the Indian Navy have been going on for a while and it was at the time when Pipavav Defence and Offshore Engineering Company was not owned by Reliance Defence Group.

As reported by FE, $1.65 billion earmarked for the US-2 acquisition for the Navy was included in a December 2014 meeting of India’s Services Capital Acquisition Plan Categorisation Committee (SCAPCC). If the deal is finalised, the Indian Navy would import two US-2s off the shelf and eventually license and assemble an additional 10 in collaboration with an Indian manufacturer. There have been several rounds of hectic discussions on whether India will be permitted to assemble the aircraft indigenously, giving it access to Japanese military technology, and whether Japan will help in marketing and export, which will be a win-win situation for both.

Tokyo has been pursuing the sale of this aircraft to India as part of stepped-up bilateral defense cooperation for three years now. This was also discussed during PM Narendra Modi’s visit to Japan in 2014.

Flying high
* The private-sector partner from India for the $ 1.6-billion US-2 amphibious aircraft project in collaboration with Japan’s ShinMaywa Industries will be selected soon
* An announcement in this regard is expected during Japanese Prime Minister Shinzo Abe’s visit to the country in December
* The Japanese company will provide all technical support to the Indian partner for re-export of the planes

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