US defence, nuclear exports to India set to revive

30 May 2009

Washington DC: An early outcome of the big victory secured by the ruling coalition in the elections to the Indian parliament may be the revival of US defence exports to India, according to Meera Shankar, India's ambassador to the United States. The ruling coalition at the centre broke away from troublesome leftwing partners in the recently held elections and with a comfortable majority are now in a position to move ahead with reforms and agreements which are likely to help speed up the defence acquisition process.

Suppliers of defence equipment and systems from the United States are likely to receive a big boost. Under the US Arms Export Control Act of 1996 the State Department and the Pentagon are required to monitor defence equipment and technology sold to other countries. The lack of such an agreement hamstrings US defence contractors who find themselves shut out from competing for defence contracts, often lucrative. It also affects India as its armed forces are denied access to high-tech weapons and systems which could have come their way.

''We are discussing language that is acceptable to the US and also preserves India's sovereignty'' Shankar said in an interview yesterday. This would allow US officials to monitor the use of American-made defence equipment. ''This is not rocket science, and I'm hopeful this will be concluded soon,'' she said.

Boeing Co estimates India's defence market to be about $30 billion in the next 10 years. Lockheed Martin and Boeing are in competition against companies from Russia, France, Sweden and Europe for an $11 billion fighter-jet order from India.

For European and Israeli companies India is already an established market. US companies have had to struggle to establish a foothold after being shut out for decades because of antagonistic positions adopted by both nations during the decades of the Cold War, when Russia became the prime supplier of weaponry to the Indian armed forces.

US companies have only now begun securing their first contracts, with a billion dollar deal for Lockheed for the supply of six 'Super Hercules' C-130J transporters to the Indian Air Force and another $2.1 billion dollar contract to Boeing for the supply of P-8I Poseidon long range maritime reconnaissance aircraft. The Boeing contract makes India the first foreign customer for the P-8A Poseidon.