Building a Modern Arsenal in India

Over the next five years, military analysts expect the country to spend as much as $40 billion on weapons procurement alone, more than its entire annual armaments budget today — upgrading systems as diverse as jet fighters, artillery, submarines and tanks in its largely Soviet-era arsenal. As a result, India will become one of the largest military markets in the world. For American contractors, which had been shut out of India for decades, the surge in demand comes just as relations between Washington and New Delhi reach a new level of warmth.

In terms of “potential for growth, India is our top market, ” said Richard G. Kirkland, Lockheed Martin’s president for South Asia.

But whether United States companies can turn that potential into profits will depend on more than warm relations between officials in their capitals; it will depend on how they finesse the particular challenges of the new market — especially, competition from their Russian counterparts.

The stakes of the contest were underscored this week when the Indian defense ministry called for bids to fill an order for 126 fighter jets, a contract that could be worth $10.2 billion.

Determined to build a domestic arms industry, India is requiring foreign suppliers to make a sizable portion of any military goods in this country. In the case of the jet fighter contract, the successful bidder must produce goods worth half the contract’s value in India. So, the American companies have been busily pairing up with locals.

Walter F. Doran, the president of Raytheon Asia, and a former commander of the Navy’s Pacific fleet, predicts that India may be “one of our largest, if not our largest, growth partner over the next decade or so.”

The hefty increase in military spending reflects the country’s changing view of itself. India, like “all aspiring nations, is seeking its place on the world’s stage,” Adm. Sureesh Mehta, chief of staff of the Indian Navy, told thousands of white-suited officers at a naval conference in New Delhi in July.

In particular, India is positioning itself as a policeman of nearby waterways, especially the Indian Ocean. A spokesman for the defense ministry, Sitanshu Kar, said: “If you look at the rim from west Asia to Asia-Pacific, that entire area accounts for over 70 percent of the traffic of the petroleum products for the whole world. We have a role to play to ensure that these sea lanes are secure.”

An American carrier, the Trenton, which the Indian Navy bought and renamed the Jalashva, can, for example, carry 450 soldiers and half a dozen helicopters, and be used to evacuate Indian nationals, deliver aid or intervene in conflict areas.

Yet India is virgin territory for American armaments makers. Decades of cold war-era distrust, when India aligned itself much of the time with the Soviet Union; followed by sanctions that President Clinton imposed after India tested nuclear weapons in 1998, made India a sort of no-go area for American companies.

Under the Bush administration, sanctions have been lifted and military ties have deepened. In July, the two governments announced a commercial nuclear energy agreement. Under the accord, the United States will share nuclear technology with India, including fuel. The deal requires a radical, India-specific exception to American law and underscores the Bush administration’s commitment, made two years ago, to help India become “a major world power.”

But many arms industry analysts say that winning big orders in India will still be a challenge for Americans. In many cases, companies will be competing directly against India’s traditional supplier, Russia, which has manufacturing agreements in place and is still the largest supplier. Though relations unraveled after the disintegration of the Soviet Union, they were repaired in the late ’90s and the two countries are negotiating some $10 billion in contracts, including an Indian air defense system.

“The Russians are going to get quite a bit of this business,” Andrew Brookes, an aerospace analyst at the International Institute for Strategic Studies in London, predicted.

Congress could present another hurdle for American companies; lawmakers could prohibit sale of the most advanced military equipment, Mr. Brookes said, while there is a perception that the Russians will “sell first-rate stuff.”

Nonetheless, Americans are winning some deals. Lockheed Martin is in final talks to sell six C-130J cargo planes for $1 billion. It would be the largest American military sale to India to date.

The defense ministry has asked Lockheed and Boeing to bid on the $10.2 billion jet order, as well as Saab, which makes the Gripen fighter, and the European team building the Eurofighter jet. They will all confront the MIG Russian Aircraft Corporation, which owns the developer of the MIG, the jet that the Indian Air Force now flies.

In general, the Russians have been the most discreet of suitors. At the recent naval conference here, Western companies took out booths, sponsored meals and cocktail hours, and had dozens of their name-tagged employees working the crowd. Several representatives from the United States armed services also glad-handed. But a Russian presence was hard to find.

Maj. Gen. Aleksandr A. Burov, military attaché at the Russian Embassy in New Delhi, said in a telephone interview that he could not comment on any commercial deals. He did make a point of noting that the chief of Russian land forces had recently visited India, stopping in Agra and Goa.

In some parts of the Indian military, officers split along generational lines, some American officers who interact regularly with the Indian military said. Older officers are likely to support purchases from Russia; younger ones may prefer buying from the United States.

The recent nuclear agreement with the United States also complicates the situation of American companies. The agreement has been strongly criticized in some corners, reflecting an undercurrent of continued distrust in this country toward the United States — which is still seen by many, mostly because of past relations, as wanting to squelch India’s rise to global prominence.

The defense ministry insists that economics, not politics, will guide its decisions. Speaking of the jet fighter deal, its spokesman, Mr. Kar, said, “We’re strictly going by two considerations — the operations requirements of the air force and the best price we get.”

American manufacturers, not surprisingly, maintain that Western technology would be an improvement over the Russian planes and weapons systems that Indians use now or could buy.

Switching to Western equipment would allow the military to “bring new technology to bear faster, with more precision,” Mr. Kirkland of Lockheed said. If the Indian Air Force chose Lockheed’s fighter, he said, it would be able to conduct joint exercises with the United States Air Force and the forces of 18 other countries that fly the plane.

Still, American contractors have no illusions about their Russian competitors. “It’s difficult to unseat an incumbent,” said Randy Belote, a spokesman for Northrop Grumman.
in full
Under the Bush administration, sanctions have been lifted and military ties have deepened.

Nothing like putting the frightners in Pakistan to help get sanctions lifted is there.

It'll be interesting to see the likes of Lockhead and Gruman up against MIG, assuming the whole thing is run fairly, which it more than likely won't be.
Presumably with all of this cash floating about, if there is a natural disaster they won't be coming cap in hand for assistance! Oh and poverty and famine will be a thing of the past.

To the tune of "And the band played believe it if you like!"
bobath said:
Under the Bush administration, sanctions have been lifted and military ties have deepened.

Nothing like putting the frightners in Pakistan to help get sanctions lifted is there.

It'll be interesting to see the likes of Lockhead and Gruman up against MIG, assuming the whole thing is run fairly, which it more than likely won't be.
Its not all out of the goodness of their hearts you know.

No doubt State Dept. strategists view India as an ideal counterweight to China.
Was in shock there, thought they were moving The Gunners to India,same as all our call centres.
It is really only a matter of time now before the Indian Government sends some of its units over to the UK, having struck deals with our political leaders, in order to protect its citizens and economic interests from the mayhem in UK cities and towns. In time they will appoint Provincial Governors, District Commissioners, and Police Superintendants to ensure that things begin to done properly and in an orderly fashion. There will be other changes, of course, the Household Cavalry will be replaced by the Bengal Lancers, and a Governor-general's Bodyguard appointed. With luck they will cure the unemployment problem because of the numbers of servants required from the local population. If we are really lucky they will actually sort out the shambles on the roads and railways.. And of course, the 2012 Olympics might actually work and be within budget.
The India Corps suffered heavily in WWI but never let anyopne down. My great grandfather served in the Meerut division alongside them. What we have gleaned from researching him shows that they were held in high regard. Indians paid a heavy price in WWII. I wished we could have had a steadier and slower road to the partition of the subcontinent that would have lead to a more peaceful transition.

We should strengthen our ties with India as much as possible. For some strange reason I think we have a bond that could potentially rival "the special relationship" in economic terms. Militarily it looks like the Ruskies have got a big lead. Is PAK-FA/SU-50 going ahead with India as a major partner?

I admire them as a people, don't forget they are the worlds largest democracy (population wise) and they will be the superpower that will rival/counter balance China in the region over the next century.
"poverty and famine will be a thing of the past."

yeah right on RM.
India is doing wonders but will never do anything serious about it's billion on less then one half a US$ a day.
It's mass of pesants, who as one old Shaib pointed out, Had probably never sen a Brit Shaib, is what gives India its massive industrial streangth, dirt cheap labour.
China is ahead of India now, but is starting to learn some of the problems of a modern sociaty.
Pensions ageing population and the imbalance of the sexes.
The west has sold off it's Heavy industry and seems only to happy to let overseas companies have the forth cumming pension and health care problems.
This is excellent news for the UK.
Despite what some may think, the UK is held in high regard in most of the world (except for the sandy bits and other places where the majority prey/pray towards mecca).

As the Indian economy grows there is so much potential for the UK.
JCB have got in on the act:

Trade is growing all the time, what ever jobs are lost to those dastardly annoying call centres will be made up, infact more than made up by other exports and trade:

And also for you Military guys the good news is that when the time comes to duff up pakistan you will have an army 1.5-2 million strong to fight beside you (watch out for my cousins, they are the tall psycopathic blokes with turbans !)

British forces are already training with them:

A bit of a change from "It ain't half hot mum" don't you think ?
Mr Jones,

Despite what some may say, when India and Britain parted in 1947 they did not part as enemies, but as friends. People have memories, however Britain always had the good sense of knowing when it was time to leave, unlike the French in Indo-China and Algeria.

Most people in India are very keen on Britain and I just can't understand why people may regard it as a threat.

Apart from the original European "discovery" of India this is the greatest business opportunity to land in the lap of the UK for a couple of hundred years.

Also it would be a great place to send chavs from the UK to learn old style English grammer and manners.
heathen_henry I don't think anybody in the developed World regards India as a threat, more as a potential serious ally against common threats (naming no names but the threat does not shave much). - I posted the article as it illustrated India's growing regional role and it’s upgrading of equipment possibly incorporating US/EU kit. Both factors of interest.

I personally see India as part of the 'Anglosphere' geo political alignment while it also develops a operational relationship with China (at the expense of certain Gilletphobes).
I may be wrong but I thought the only threat bit was during the cold war as the US picked to ally with Pakistan cos India was non-aligned. I think that is likely to change now. India's economic growth (along with China's) may cause some major bumps for the developed economies as markets re-align but in the long run I think it will be beneficial. All in all i'd quite like the UK to be more involved with India as an ally.
My reference to being seen as a "Threat" only refers to economic, not military.
However there is a red neck, hill billy from the USA called Jesse Helms who has different views:

I don't think many take him too seriously though.

I will be visiting India in the coming year for the first time in about 20 years and have been told that the change is amazing. Apparantly there is plenty of money to be made exporting food refrigeration equipment from the UK.
One of the places that I plan to visit is my old boarding school in Dagshai near Shimla.
It is basically an old prison which has housed Boers and mutineers from the Connaught Rangers, one of which was executed.
I was there in 1975 and I remember some of the old colonial Brits had decided to stay on. You called always tell where they lived because the front gardens were immaculate. Every Friday and Saturday evening they used to dress up for their Bridge and Poker evenings.
I wonder who they cheered at cricket matches ??

THe future is very bright for Anglo India relations especially after todays Sunday Times story regarding Pakistan



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