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India approves $4bn Boeing military deal

India approves $4bn Boeing military deal
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First Published: Mon, Jun 06 2011. 08 10 PM IST
Updated: Mon, Jun 06 2011. 08 10 PM IST
New Delhi: Government on Monday cleared a more than $4.0-billion deal to buy military transport planes from Boeing in the biggest ever defence deal between New Delhi and an American firm, officials said.
The agreement for the C-17 Globemaster III planes, used for transporting heavy equipment, was cleared at a meeting of the government’s cabinet committee on security affairs, a senior government official said.
The defence ministry declined to comment but the official, who spoke on condition of anonymity, told AFP that the cabinet gave its clearance to buy 10 C-17 aircraft.
He said the procurement would be done as a government-to-government sale and that Boeing would have to invest 30 percent of the contract amount to set up defence-related facilities in the country.
The Press Trust of India news agency last month said the Indian air force was also planning to place an order for an additional six C-17s after finalising the initial order for 10 aircraft.
The C-17 advanced airlifter can carry large combat equipment and troops or humanitarian aid across international distances to small airfields anywhere in the world, according to the company.
India’s technology-starved air force, the world’s fourth largest, wants to replace and augment its fleet of ageing Russian-built transport planes.
Monday’s approval came two months after New Delhi kicked out US firms Boeing and Lockheed Martin from a race among six global aviation giants to sell 126 fighter jets worth almost $12 billion dollars to India.
India shortlisted Typhoon Eurofighter of the European Aeronautic Defence and Space Company (EADS) and Rafale of French Dassault after removing Boeing, Lockheed, Russia’s MiG builders and Sweden’s Saab from the race for the warjet deal.
India in 2008 agreed to buy six Hercules C-130J transport planes from Lockheed for $962 million, then the country’s biggest ever military aircraft deal with the United States.
In January of the following year, India signed a $2.1 billion deal with Boeing to buy six maritime surveillance aircraft for its navy.
India, which in February boosted military spending to Rs 1.65 trillion ($36 billion) for the financial year to March 2012 from Rs 1.47 trillion the previous year, plans to buy hundreds of helicopters and other aircraft.
According to the Stockholm International Peace Research Institute think tank, India over the last five years was the world’s biggest importer of weapons.
India is upgrading its million-plus military with hardware worth tens of billions of dollars because of its long-standing tensions with regional rivals China and Pakistan.
It has also begun honing homeland security since the 2008 attacks by Islamist gunmen which left 166 people killed in India’s financial capital Mumbai.
India blamed the attacks on militants based in Pakistan and official agencies of that country. Islamabad has denied the charges.
The two estranged neighbours, both nuclear-armed rivals, have fought three wars since their independence from the British in 1947.
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First Published: Mon, Jun 06 2011. 08 10 PM IST