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World gathers in India to win major contracts

World gathers in India to win major contracts
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First Published: Wed, Feb 11 2009. 12 58 AM IST

Steel birds: The scene at the Yelahanka air base on Tuesday. India has sewn up at least $5 billion defence aircraft deals since the 2007 airshow. Shailendra Bhojak / PTI
Steel birds: The scene at the Yelahanka air base on Tuesday. India has sewn up at least $5 billion defence aircraft deals since the 2007 airshow. Shailendra Bhojak / PTI
Updated: Wed, Feb 11 2009. 12 58 AM IST
Bangalore: At this year’s Aero India show, a biennial schmooze fest for aerospace firms, the world’s biggest makers of fighter jets, spy planes, helicopters and radars will show off their wares in Bangalore starting Wednesday, hoping to win some of the tens of billions of dollars India is expected to spend buying such hardware.
Aerospace firms say they will be patient with India, where decisions still take years coming, although the defence procurement process has accelerated over the past decades.
Patience could eventually prove rewarding.
Steel birds: The scene at the Yelahanka air base on Tuesday. India has sewn up at least $5 billion defence aircraft deals since the 2007 airshow. Shailendra Bhojak / PTI
Aided by a six-year economic boom, India’s military will spend at least $30 billion (Rs1.46 trillion) by 2012, a significant portion of it on 126 fighter jets, for which it has floated the world’s largest tender in recent years. The deal for the so-called medium multi-role combat aircraft may cost some Rs42,000 crore.
India is the only major nation in the world that uses weapons and fighter planes from both Western nations and its traditional ally Russia. China is a large importer from Russia while the US and Europe insist on locally made weapon systems for their Armed Forces. Moscow rarely imports arms.
The Indian Air Force’s (IAF) plans include replacing a third of its fleet of Russian-built MiG-21 planes. “(In the) next few years, you will find every bit (of) inventory (with) some kind of transformation. Assets being inducted, upgraded and replaced—it will be an entirely new environment,” India’s air chief, Air Marshal Fali Major, had said on 17 January.
The IAF is expected to invite six firms—Lockheed Martin Corp., Boeing Co., European Aeronautic, Defence and Space Co., Saab International, Dassault Aviation, and Russia’s MiG Corp.—to test their planes from April over terrain ranging from the deserts of Rajasthan to the snow-laden peaks of the Himalayas.
On a conference call with analysts late last month, Bruce Tanner, chief financial officer of Lockheed Martin, put in context the Indian deal with other potential supply contracts in Taiwan for 66 of its F-16 planes and Romania’s nearly two dozen. The longer objective is the India competition (or deal) for the MMRCA (medium multi-role combat aircraft), which is 126 aircraft, Tanner said.
Traditionally, India’s defence purchases have been long-drawn and often delayed. The 66 Hawk Advanced Jet Trainer deal it signed in 2004 with British aircraft maker BAE Systems Plc. took at least two decades to conclude.
That process has speeded up, with India sewing up deals worth at least $5 billion to buy planes, missiles and helicopters since the last Aero Show in 2007.
Deals since then include the purchase of 80 Russian-made Mi-17v5 helicopters, three Boeing business jets for VIP travel, and six C-130J Super Hercule transport aircraft from Lockheed Martin. Three IAF squadrons are being equipped with Israel’s Spyder surface-to-air missiles and two squadrons with Akash medium-range missiles from Bharat Electronics Ltd. In addition, the Armed Forces are acquiring 159 Dhruv advanced light helicopters from Hindustan Aeronautics Ltd.
Even the biggest among such deals—a $2.1 billion contract for eight P-8I maritime spy and anti-submarine aircraft awarded to Boeing—took just two years to sign.
Industry executives are hoping India maintains the same pace. The stakes, though, are much higher.
“The scale and scope of the (deal for) 126 fighters—worldwide if you look at it, this is the most important competition in the fighter market. There is no global parallel for this,” said Vivek Lall, vice-president for Boeing and India country head, integrated defence systems.
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First Published: Wed, Feb 11 2009. 12 58 AM IST