Global giants line up for $10-bn IAF aircraft deal

BY: The Indian Express Limited

Top leaders of the world are lining up for a $10-billion Indian order for 126 fighter aircraft. Companies from the US, France and Russia have put in their bids for the 126 MMRCA for the Indian Air Force (IAF) and the visiting leadership are expected to lobby with their counter parts. The US President Barack Obama’s visit in November will be followed by the French President Nicolas Sarkozy’s in early December and later by the Russian President Dmitry Medvedev.

Sources told FE on conditions of anonymity that, ‘‘the six contenders have yet to be shortlisted. The defence ministry can decide on shortlisting the contenders only once it have the technical offsets evaluation committee report along with the Field Trial report.’’

‘‘After it goes to the Cabinet Committee on Security for a final decision, there will government-to-government negotiations in an effort to get additional benefits for the country,’’ the source added.

American companies, Lockheed Martin F-16IN, Boeing F/A-18, French Dassault Rafale, EADS Eurofighter Typhoon, Saab Gripen and Russian MiG-35 are in the running for the 126-aircraft programme.So far the IAF has had a meeting with Lockheed Martin and the French ‘Dassault’ of Rafale.

According to sources, ‘‘Vendors who are compliant rule wise, Defence Procurement Policy and Technical offsets will ultimately be opened for consideration. Also, the lowest bidder, designated L1, will be selected as the medium multi-role combat aircraft (MMRCA).”

The whole procedure is expected to take a couple of months and by then Obama will be here. ‘‘While the MMRCA deal will be topping the agenda. Several other pending deals including the medium weight helicopters where the RFP is likely to be scrapped will be talked about. It is expected that India could ask the US for encryption technology too.’’

French President Nicholas Sarkozy and his wife Carla Bruni will arrive on a two-day visit on December 6-7. ‘‘Definitely MMRCA deal come up for discussions. Eventually the selection of the MMRCA will be political decision,’’ said officials.

Apart from inking pact for the supply of two reactors, India and France will also sign a $2.2-billion deal to upgrade its Mirage fleet. The upgrade deal, which had been hanging fire for the past two years due to differences over the price, is now ready to be inked, sources in the defence ministry said.

France is also keen that India approve the Maitri air-to-surface Low-Level Quick Reaction Missile (LLQRM), which has been jointly developed by the.DRDO and France’s MBDA. While the missile’s final design has been locked up, the government is still to give a go ahead for the joint project.

Though India and Russia are implementing several joint military programmes, the most important are the production and upgrading of the BrahMos missile and the construction of fifth-generation supersonic fighters, among other things.The MiG-35 is one of the contenders for the MMRCA is a MiG-29. The presence of MiG-29 infrastructure and a new plant for licence-building RD-33 Series III engines in India makes compliance with industrial offset requirements easier. The Russians are keen to sell the MiG-35 to the IAF, and could possibly on the agenda of talks.

US pushes defence as ‘central pillar’ in ties

BY: BUSINESS STANDARD

The battle to re-engine the Indian Air Force’s 128 Jaguar fighter jets is in full throttle, with Britain’s Rolls Royce and US’ Honeywell International taking the war back home right inside the rarefied offices of South Block.British Prime Minister David Cameron’s recent comments in Bangalore on the “export of terror” by Pakistan have enormously pleased the Indian strategic establishment, but the fact is that India is already gearing up for the November visit of US President Barack Obama and is keenly aware that there is nothing like a defence deal to sweeten the mood.For example, the Jaguar engine deal is worth an estimated $670 million, a lucrative sum in the recession-hit economies of the US and the UK and definitely welcome in an era of rising unemployment, emptying treasuries and never-ending body bags from the AfPak war front.

On the other hand, as India prepares to overhaul, upgrade and buy new defence equipment for its armed forces — by 2022, military equipment worth $100 billion is likely to be purchased, besides another $9.7 billion on homeland security by 2016 — and the world’s top defence companies make a beeline for New Delhi’s door, it is aware that defence cooperation is becoming its chief instrument in the pursuit of its foreign policy objectives. That is why, as India and the US prepare for Obama’s four-day India visit, Washington DC is pushing New Delhi to recognise that “defence cooperation is the central pillar” in the expanding bilateral partnership, the president of the US-India Business Council Ron Somers said.

According to Somers, deeper defence collaboration would not only generate thousands of jobs in India and the US (because of India’s offset policy), but would also signal that the US is no longer an “unreliable supplier of defence goods as well as open up technological collaboration” in every sector.Defence Minister A K Antony is visiting Washington DC towards the end of September, and even though India typically shies away from concluding defence deals during political visits, many Americans feel it’s high time India compensates the US for the “heavy-lifting” it performed by pushing through the Indo-US civil nuclear deal from 2005-2008.

Typically, however, the government has followed the middle path so far, awarding the Hawk Advanced Jet Trainer deal to UK’s BAE Systems, besides an additional $350 million to Rolls Royce for engines for the Hawk — both for the IAF as well as for the Navy.“For a middle power like Britain, that is good money,” said an Indian official on the condition of anonymity.Meanwhile, over the last year, India has also bought nearly $6 billion worth of defence goods from the US, including six C-130 J “Super” Hercules transport planes (with the option to sell six more), 10 C-17 Globemaster-III strategic lift aircraft worth $3 billion (with the option to sell 10 more) as well as eight Boeing maritime surveillance P-8I aircraft worth $2.1 billion.

But since the jewel in the crown of the Indian defence market — a 126-fighter jet order for the IAF’s Medium Multi-Role Combat Aircraft (MMRCA) worth $11 billion — is not going to be decided by the time Obama visits India, the US government is hoping that India will also favour Honeywell’s F125IN thrust class engine over Rolls Royce’s Adour MK 821engine for its Jaguar fleet.“An enhanced defence relationship is of huge symbolic importance,” one US official said, adding, “it sends a powerful political message on the marriage of doctrine and strategy.”

Indian officials admitted that although Russia continued to supply 70 per cent of the IAF’s hardware, the MMRCA deal was significant not only because of the large number of new fighter jets IAF would buy, but because entire platforms worth many more billions would have to be purchased so as to sustain the proper use and maintenance of the jets. But the US officials also admitted that the heightened interest in selling sensitive defence equipment to India was not limited to “transactional gains”, but was also impelled by shifting strategic considerations in other parts of Asia.

The officials were not willing to name either Pakistan — despite the exposes by Wikileaks of Pakistan’s “double-game” on the AfPak warfront — or China’s recent belligerence in the Yellow Sea as serious causes of concern, but it’s clear that for the first time since the Obama administration came to power, the US is both confused and bewildered about the manner in which it should confront China’s rising power or Pakistan’s blunt blackmail.

Beijing’s warning that the US aircraft carrier, USS George Washington, should not exercise in the Yellow Sea has gone down very badly in Washington, and is being perceived a direct challenge to the security and safety of its treaty ally, South Korea. In recent days, a compromise seems to have been struck, with Korea stating it would conduct exercises on its own.On Af-Pak, conversations between India and the US are now dominated by considerable frankness, but the Sino-US relationship remains a far more complex issue. US officials, pointing to China’s incredible rise, say they would like India’s help in maintaining Asia’s security and stability, especially to keep the sea-lanes open for navigation.

It is not clear whether Antony will sign three key pacts the US has been pushing for, like the Logistics Support Agreement (LSA), the Communication Inter-Operability Agreement (CISMOA) or the Basic Change and Cooperation Agreement for Geo-Spatial cooperation.

The US is keen that at least the CISMOA and the BECA be inked soon, arguing it will only pave the way for removing key Indian entities from the US export control list or that the transfer of high-tech avionics to India may not be possible.But India remains unfazed, arguing that Indian entities like DRDO, ISRO and BEL should be removed on their own merit and that the “time has not yet come” for pacts like the LSA which envisage US and Indian militaries providing logistics support, refuelling and berthing facilities for each other’s warships and aircraft.

IAF Recommends Rafale & Eurofighter For MMRCA-Times Now

After exhaustive trials of six fighter jets, Indian Air Force (IAF) has made its choice clear to the Government on the kind of fighter jets needed. Frontrunners for the force are French fighter Dassault Rafale and the Eurofighter Typhoon built by the European consortium. Bernhard Gerwert, Chief, EADS, says “If you are taking into account the portfolio of EADS we can bring the bridge between civil aviation and military aviation.” But the Americans and Russians have lost out. Boeing’s F18 no longer a frontrunner and Sweden’s Gripen too falling off the Indian radar.

Despite MiG 35s big thunder, its engine failing to impress while the F-16, according to the IAF has no future. Another reason favouring Rafale and Eurofighter is political. Thomas Matussek, German Ambassador, “We regard India as a strategic security partner and this is why we do not insist on an end user monitoring agreement period.” So when the mother of all defence deals is signed for the 126 Multi-Role Combat Aircraft either Rafale or the Eurofighter will fly away with the Rs 42,000 crore deal.