Navy inks $2.1 bn deal with Boeing for eight aircraft

The government had approved the $ 2.1 billion deal in its last Cabinet Committee on Security (CCS) meeting in 2008 after long negotiations between the Indian Navy and the Boeing Company.

The contract, that has been signed, is unique as it has not been conducted under the US foreign military sales (FMS) programme but as a direct commercial agreement between The Boeing Company and the Indian Navy. However, according to sources, issues such as end-user verification agreement between India and US for these defence products were still pending.

According to industry sources, the Boeing P-8I long-range maritime reconnaissance (LRMR) aircraft was signed between defence ministry and Boeing?s country head Vivek Lall here on January 1.

The deal will give Indian Navy a marked edge in the Indian Ocean region and one that is comparable to its US counterpart, the aircraft?s manufacturer say.

?This will be the first time the Indian Navy will be able to operate a platform almost simultaneously with the US Navy,? Richard Buck, Boeing?s international programme manager for the P8, told FE.

?Besides, India will be able to leverage on the substantial investment made in the P8 by the US Navy without having to pay for the development costs,? Buck said, adding that $4 billion had already been spent on the development of the aircraft.

The contract, that has been signed, is unique as it has not been conducted under the US foreign military sales (FMS) programme but as a direct commercial agreement between The Boeing Company and the Indian Navy.

The first aircraft has to be delivered within 48 months of the contract being signed and the remaining within an eight-year time frame, Buck said.

The Navy will get its first aircraft under the deal by 2012-13 and the rest of the aircraft would be delivered in phases by 2015-16, sources said.

The Indian Navy had, at one stage, contemplated leasing a few Lockheed Martin P3 Orion aircraft as an immediate replacement for its ageing fleet of Soviet-era Il-38 maritime reconnaissance aircraft but dropped the idea in favour of the next generation P8I that has been customised for India.

?Let?s face it. The Orion?s a wonderful aircraft but its technology is 50 years old. With the P8I, we are offering is next generation technology that will keep the plane in service till 2050 at the least.

?Be it in an anti-submarine warfare, anti-surface warfare, intelligence gathering, surveillance or reconnaissance roles, the P8I combines superior performance and proven reliability against any other aircraft flying today,? Buck said.Besides, there is commonality with the three Boeing Business Jets that the Indian Air Force has purchased ?and there is, therefore, life cycle cost compatibility?, he added.

?To add to this, Boeing?s worldwide logistics, maintenance and training support facilities are already in place,? the official said.

What is interesting is that the P8I deal would be the largest deal India signed with the US, after the $ 962 million deal signed in 2007 for six Lockheed Martin?s C-130J ?Super Hercules? transport aicraft for its special forces.