The race is on for India's mega fighter deal

The race is on for India's mega fighter deal

Posted in India | 30-Apr-08 | Author: Siddharth Srivastava| Source: Asia Times

US made F-16 aircraft

NEW DELHI - Competition and lobbying is going to be intense for the US$11 billion 126 multi-role combat aircraft deal that India is likely to sign a couple of years from now.

This Monday, the six contenders of the mega contract submitted their bids to the federal Defense Ministry, each offering "strategic and unequivocal partnerships", including joint production, government support and advanced jets at the cheapest cost.

The bids were submitted following an extension from February when they were first due, with major fighter jet aircraft makers from America, Europe and Russia staking claims. The request for proposals for the deal was issued in August 2007, after delays that span over a decade and a half.

The fighters in the fray are the American Boeing's F/A-18 Super Hornet, Lockheed Martin's F-16 Falcon, Russian MiG-35s, Swedish Saab's Gripen, French Dassault Rafale and the Eurofighter Typhoon by a consortium, the European Aeronautic Defense and Space Company (EADS).

The multi-role fighter is a crucial cog in India's combat aircraft modernization plans, involving three main systems: the Indian-developed Tejas as a light combat aircraft, the new multi-role fighter in the medium combat aircraft category, and Russian Sukhoi-30MKIs as heavy combat aircraft.

"We will now seriously examine all the bids and shortlist the companies in due course to two or three, before taking a final decision," a Defense Ministry spokesperson said. "Even if everything does work out smoothly, we don't expect the first batch of fighters in India before 2011."

The selection process will begin with the Indian Air Force (IAF) making a technical study. It then submits its report to the Defense Ministry, which looks at both the financial and technical aspects. Then it goes to the cabinet committee on security, which comprises top ministers, including the prime minister, to make a final call. It is at the cabinet stage that the political and strategic aspects come into play.

Middlemen can be involved at any stage of the deal. In the past, sting operations, such as those by the noted investigative website Tehelka.com, have shown that defense officers, political party representatives as well as friends, relatives and minions, can be involved in influencing defense contracts.

About 20 fighters will be bought off-the-shelf and the remaining 100-plus will be produced in India under a transfer of technology agreement. New Delhi has said it will ultimately settle for a single fighter jet platform, instead of multiple sources. Since 1999, India's military purchases have been worth $25 billion; the country is likely to spend another $30 billion by 2012, making it one of the biggest military buyers among developing countries.

Many defense analysts say Lockheed and Boeing are front-runners to win the jet contract, but the race is far from over, given domestic Indian politics that opposes any US "hegemony", whether actual or apparent, apart from technical considerations. The fate of the derailed India-US deal on civilian nuclear cooperation is one such pointer.

Indian defense deals are also notorious for delays, political interference, lack of transparency and hush money via agents and middlemen that has substantially stymied acquisition processes in the past.

US companies, however, are not deterred and continue to offer irresistible spin-offs from futuristic fifth-generation fighter programs, such as Lockheed Martin's F-35 "Lightning II" project. St Louis-based Boeing submitted its 7,000 page proposal offering its advanced Super Hornet.

The Indian variant, based on the US Navy's F/A-18E/F, is equipped with the latest technology such as Raytheon's AESA radar with proven reliability, attractive life-cycle cost dynamics and air defense system.

Australia has also ordered 24 Super Hornets, while many international customers are in negotiations to procure the aircraft.

Boeing has signed long-term partnership agreements with Indian entities with defense interests, such as state-run Hindustan Aeronautics Limited (HAL), Tata Industries and Larsen and Toubro, which will be engaged in production and assemblage if Boeing wins the deal.

According to Chris Chadwick, president of Boeing Precision Engagement and Mobility Systems, "Boeing will give Indians a direct hand in building an advanced fighter aircraft."

Lockheed calls its fighter offer the F-16 IN and said it is "specifically tailored to meet IAF needs and is the most advanced multi-role combat aircraft in production anywhere in the world today". Lockheed too has been tying up with Indian defense players in preparation for the bid.

Not to be undone, European aircraft makers are making a concerted effort. EADS has invited India to "become a member of the successful Eurofighter family" and be its "partner of choice" in "long-lasting political, industrial and military relations".

The chief executive of military air systems at EADS, Bernhard Gerwert, said, "If India becomes a partner, they will also become a partner in all future technology enhancement. As part of our industrial cooperation offer, we invite India to become our member."

India became the first non-European country to be extended such an invitation during a recent event organized by EADS in New Delhi, attended by the envoys of Germany, Britain, Italy and Spain. The Eurofighter consortium consists of Britain's BAE Systems, Italy's Alenia Finmeccanica and German and Spanish units.

Meanwhile, Sweden's Saab has positioned its Gripen fighter as the "independent choice" for India, and it could well be the dark horse. Following the line of Boeing and Lockheed, Saab is also looking to tie up with HAL and the Tata Group to meet local investment standards, should they arise.

Speaking to the media on the day of submitting its request for proposal to the IAF, Ake Svensson, chief executive and president of Saab, said, "We think the Gripen is perfect for Indian requirements and complements your heavy class Sukhoi Su-30 well. Also, the single engine, coupled with a high rate of reliability and a low cost of maintenance make it a viable option for India."

France is banking on India's positive experience with the Mirage-2000s, inducted into the IAF in the mid-1980s, and is hard-selling its Rafale multi-role fighter.

Russia stands firm with its MiG-35 jets, despite recent irritants in the long-standing partnership with Delhi. India's defense relations with Russia continue to be deep. This is in part due to India's efforts to bring oil and gas from the Sakhalin oil fields. Last October, India and Russia agreed to jointly design, develop and manufacture the fifth-generation fighter aircraft.

The IAF is inducting multi-role fighters such as Sukhoi-30MKIs (230 jets have also been contracted from Russia for $8.5 billion). India has also signed a 40 billion rupee (US$994 million) deal with Russia to upgrade its 69 MiG-29s by 2011.

Following the success of jointly building the Brahmos cruise missiles, New Delhi is looking to extend its cooperation with Russia in the co-development of a multi-role transport aircraft.

Some analysts, however, say New Delhi's defense overtures could actually be preparing ground for a bigger loss for Moscow as the deal could go either to Europe or America.

Indeed, an emerging trend in India's defense policy is a skilful balancing of its strategic relationships with the major powers, (Europe, Israel, Russia and the US), thus doling out contracts to practically all of these countries.

Britain's BAE systems have benefited hugely from the Indian purchase of Hawk aircraft trainers. India has finalized the purchase of six Hercules transport aircraft from Lockheed Martin and recently announced its intention to collaborate with Israel in developing a futuristic long-range surface-to-air missile.

The fighter choice will not be easy. The surfeit of bidders only makes India's negotiating position stronger. State-of-the-art aircraft, deep pockets and well-oiled networks will all count.

Siddharth Srivastava is a New Delhi-based journalist.

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