India eyes $2b defence deal with US

NEW DELHI: After joint combat exercises to develop "interoperability", the Indo-US military tango is now firmly waltzing into the arms purchase arena as well. With the over $1-billion deal for six C-130J 'Super Hercules' aircraft in the bag, an even bigger defence contract is now headed the US way. Sources on Monday said the defence ministry and Boeing have begun the "commercial price negotiations" for the purchase of eight P-8i long-range maritime reconnaissance (LRMR) patrol aircraft, with anti-submarine warfare capabilities, for the Indian Navy. Unlike the Super Hercules deal, which as reported by TOI earlier is a direct 'foreign military sale' contract under a government-to-government arrangement, the P-8i has emerged the victor in the global LRMR sweepstakes held by India to plug operational gaps in its maritime snooping abilities. The P-8i, based on the Boeing-737 commercial airliner, has out-performed the European Aeronautic Defence and Space Company's A-319 maritime patrol aircraft and other contenders in meeting 'qualitative requirements' in the technical trials held by the Navy. "The contract will be signed soon. The first P-8i will be delivered within 48 months, that is in mid-2012 and all the eight by mid-2015. They will replace the Navy's eight aging Tupolev-142Ms," said a source. India, incidentally, had earlier rejected the US offer to lease two P-3C Orion reconnaissance aircraft under a $133-million contract. India, of course, remains unhappy over the American decision to sell eight more P-3C Orion aircraft to Pakistan, which already has two such planes in its inventory. Once it's inked, the P-8i deal worth around $2 billion will be the biggest-ever defence contract with the US, a minor player in the lucrative Indian arms market so far. While Russia notches up sales worth about $1.5 billion to India every year, Israel chalks up an annual tally of around $1 billion. America's only big-ticket deal with India in recent years has been the $190 million contract in 2002 to supply 12 AN/TPQ-37 firefinder weapon-locating radars. Then, of course, India last year acquired amphibious transport vessel USS Trenton for $48.23 million, with the six UH-3H helicopters to operate from it costing another $39 million. With India spending a whopping $25 billion on arms imports since the 1999 Kargil conflict, and planning another $30 billion worth in 2007-2012, the US is obviously desperate to grab a big piece of action. It has been particularly aggressive in marketing its F/A-18 "Super Hornets" (Boeing) and F-16 "Falcons" (Lockheed Martin) for the gigantic $10.4-billion project to supply 126 multi-role combat fighters to IAF. Apart from the defence deals, with US secretary of defence Robert Gates slated to arrive in India on February 25-26, the two countries are getting ready to sign agreements like the Communication Interoperability and Security Memorandum of Agreement (CISMOA), Container Security Initiative (CSI) and the end-use verification agreement of US defence equipment. The Logistics Support Agreement (LSA) — under which Indian and American militaries propose to provide each other with logistic support, refuelling and berthing facilities for each other's warships and aircraft — has, however, been put on the backburner due to opposition of the Left. CPM leader Prakash Karat has termed LSA "far more dangerous than the nuclear deal" in its implications. But despite Left opposition to military ties with the US, the two nations have already scheduled at least five joint combat exercises in 2008. "Procurements is just one facet in the overall robust defence engagement with the US. The American forces, for instance, now want to further scale up the level and complexity of exercises with Indian forces. Brigade-level exercises will be in place in four-five years," said a source.