Defence contractors see open door in India


Global defence companies have found India. As the fast-gowing Asian economic powerhouse tackles a massive modernization of its forces to counter China and tackle security threats at home and from Pakistan, defence companies are lining up at India‘s door for a share of the pie.

India will spend more than $30 billion over the next five years to modernise its largely Soviet-era arms and introduce new high-tech weapons systems, opening its doors to global defence companies in the process, Reuters reports.

“We are undertaking a massive modernization program. We need modern weapons to counter all kinds of security threats,” M.L. Kumawat, India‘s Special Secretary (Internal Security) told Reuters. “Defence modernisation has to go on.”

Experts say regional instability in neighboring Pakistan from the growing influence of the Taliban, and China‘s ambitious military plans on the other side, has forced India to take a fresh look at its old defense systems and make changes.

Last November’s Mumbai attacks, in which at least 166 people were killed by 10 gunmen in three days, exposed glaring holes in India‘s security system.

India blamed Pakistan for the attack, but Islamabad rejected New Delhi‘s accusations that the gunmen had support from official Pakistani agencies.

Tension between India and Pakistan has increased as New Delhi “paused” a slow-moving peace process to settle festering border disputes.

But India is more worried about China and its strategic interest in the region.

India‘s Air Force chief said last month that New Delhi faces a greater threat from China as the country knows little about Beijing‘s combat capabilities.

After the Mumbai attacks, New Delhi increased its defense spending by 23.7 percent to $28.9 billion this year and is pushing forward with pending defense deals.

“Post-Mumbai, there appears to be greater political compulsion to redress military stasis, which has accreted over a decade,” said C. Uday Bhaskar, a Delhi-based strategic affairs expert.

Dozens of companies are making inroads into India‘s defense market.

India will soon hold field trials for the purchase of 126 fighter planes in a $10.4 billion contract that is one of the world’s biggest current arms deals.

Boeing’s F/A-18 Super Hornet; France‘s Dassault Aviation Rafale; Lockheed Martin Corp’s F-16; Russia‘s MiG-35; Sweden‘s Saab JAS-39 Gripen; and the Eurofighter Typhoon, produced by a consortium of British, German, Italian and Spanish companies, are all in the race for the lucrative fighter contract.

India‘s new ruling coalition, freed of pressure from its former Communist allies, which had objections to defense deals, is speeding up the process of acquiring the fighters.

US manufacturer Boeing is looking to bid for defense projects worth up to $31 billion over the next 10 years in India, as strategic ties between the two countries deepen.

Lockheed Martin, one of the world’s largest defense companies, is aiming for deals with India worth $15 billion in the next five years and wants to develop defense technology with Indian companies.

“There is a great opportunity for foreign vendors and that is why they are setting up offices here, as India will continue to be a very attractive market for the next 20 years,” retired Major General Ashok Mehta told Reuters.

Companies looking to be part of the Indian expansion include US aircraft parts maker Rockwell Collins Inc, which plans to quadruple its staff in India by 2012.

India is a very big growth market for us, especially on the military side,” said regional managing director T.C. Chan.

Lockheed spokesman Jeff Adams said his company was looking forward to working with India on solutions to security and service requirements.

“In all cases, Lockheed Martin follows the relationships between governments, and as the US government and the government of India begin to see future alignments, we will look forward to supporting the needs of our customers,” Adams said in an email.