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US arms makers jockeying for sales to India
Published on 29 Apr. 2011 11:00 PM IST
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India’s choice of European warplanes in an $11 billion competition to update its combat fleet was a setback for US aerospace companies, but it is not game over for the Americans.
US arms makers are still jockeying for billions of dollars in sales to India, which plans to modernize its old, Soviet-era military equipment and technology. Joel Johnson, an international aerospace trade expert, said India may have opted for a European fighter because of a history of US sanctions tied to its nuclear program and because of technology transfer constraints.
US contractors are increasingly pinning their hopes on overseas markets for revenue growth to help offset a projected slowing of Pentagon demand due to US fiscal belt-tightening.
Eliminated from the multi-role fighter race were Chicago-based Boeing Co’s F/A-18 SuperHornet and Bethesda, Maryland-based Lockheed Martin Corp’s F-16. They had been vying with European and Russian rivals to supply 126 fighters to India. A deal would have capped closer ties between the US and Indian militaries.
The decision shuts US companies out of one of the decade’s most hotly pursued arms deals, even as Washington expands strategic ties with India, partly as a hedge against China’s growing military clout.
Richard Aboulafia of the Teal Group aerospace consultancy said a US win in the Indian fighter competition “would have been the linchpin of a strategic, military and economic relationship that would have benefited a lot of US companies.”
He said losing the contract was more of a strategic and political blow to the United States than an industrial one. It was unclear why the Indian government short-listed the Eurofighter made by Britain, Germany, Italy and Spain, and France’s Rafale for the $11 billion contract.
Boeing said in a statement it was requesting a “debrief” from the Indian Air Force and would then decide on “possible options.”
Some analysts such as Bryron Callan of Capital Alpha Partners theorized the US government had been unwilling to transfer as much sensitive electronic warfare and radar technology as India had hoped. If so, this would not be as relevant in deals that do not involve fighter planes.
A person from the US industry with first-hand knowledge of Indian weapons purchases said big Indian arms programs of this type had a history of unraveling and going back to square one.
The US companies are hoping for explanations that will let them better understand Indian processes and procedures with an eye to future competitions.

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