India okays US$4.1 bln buy of Boeing C17 planes-source


India’s cabinet panel approved a US$4.1 billion purchase of 10 C-17 military transport planes from Boeing Co , a defence ministry official said, which could sweeten ties between the two countries frayed over an earlier rejection.

The approval comes after New Delhi rejected bids from Boeing and Lockheed Martin for an US$11 billion fighter jet contract in April and short-listed two European suppliers.

The United States expressed its disappointment over that rejection and some analysts had said it could delay attempts to forge a strategic alliance between New Delhi and Washinton, Reuters reports.

India is one of the most lucrative markets for defence equipment as New Delhi looks to modernise its armed forces. President Barack Obama had lobbied hard on behalf of US defence suppliers during his visit last year.

Relations between the two countries have warmed since the end of the Cold war, when India was seen as closer to the Soviet Union.

The United States and India signed a landmark civil nuclear cooperation deal in 2007 and Obama last year promised to back India’s bid for a permanent seat on the UN Security Council.