India-US defence deals to get a boost

Written by Huma Siddiqui | New Delhi | Updated: May 31 2009, 07:13am hrs
The return of the Congress-led UPA to the Centre is likely to revive the fortunes of US defence suppliers in India.

In fact, barely days into its second consecutive term, the UPA government has issued tenders worth over $1 billion to meet urgent requirements of the armed forces. While a $600-million tender for attack helicopters was issued early last week, the defence ministry issued another tender later in the week to acquire 15 heavy-lift helicopters worth around $700 million.

But issues, including the long-pending End User Agreement, which allows US officials to monitor the use of American-made defence equipment, need to be sorted out.

We are discussing language that is acceptable to the US and also preserves Indias sovereignty to allow US officials to monitor the use of American-made defense equipment, Meera Shankar, Indias ambassador to the US said in Washington on Friday. Without the End User Agreement, US defense companies including Lockheed Martin Corp and Boeing Co would be shut out of Indias defence market, estimated to be about $30 billion in the next 10 years.

However, the American defence equipment industry is hopeful that the Manmohan Singh government will push for modernisation of the armed forces.

According to Boeing Co, the second-biggest US defence contractor, India s military revamp and warmer ties with the US after recent elections may boost Indias spending on defence equipment, including helicopters and fighter jets. Jim Albaugh, Boeings defence chief, said, India is doing a major recapitalisation of a lot of defence equipment. Were talking about attack helicopters, heavy helicopters, ocean surveillance and attack airplanes. Eventually, they are going to have some interest in airborne early warning and control. US-based Lockheed Martin and Boeing are in race for the $11 billion 126 MMRCA and competing against companies from Russia, France, Sweden and the Europe.

Talking to FE, AVM (retd) AJS Walia, managing director (India & South Asia), Sikorsky Aircraft Corporate, said, With the Congress getting the mandate, there is absolutely no doubt that the processes for procurement of defence equipment, started in their previous regime, will get the same enthusiasm and aggressive approach to modernise the Indian armed forces. He said the US defence companies were looking forward to participate in building the Indian defence forces inventory that is due for replacement and replenishment.