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India's US$10.2 billion fighter jet deal may take years to firm up

India's US$10.2 billion fighter jet deal may take years to firm up

India's plan to buy 126 fighter jets for its air force may take years to come to fruition, analysts said Wednesday, a day after the government invited bids for what would be the country's biggest ever defense purchase.
Major defense purchases by India in the past have often been dogged by bureaucratic delays, hectic lobbying by potential suppliers and political controversies. The fighter jet deal appears unlikely to be an exception, analysts said.
"India has a distinction of taking an unusually long time for large defense purchases," said Uday Bhaskar, the former director of the New Delhi-based Institute of Defense and Strategic Analysis.
On Tuesday, the Indian Defense Ministry invited six aircraft manufacturers, including U.S.-based Boeing Co. and Lockheed Martin Corp., to bid on a combat plane contract worth up to 420 billion rupees (US$10.2 billion; euro7.5 billion).
The selected aircraft for the highly coveted competition include Russia's MiG-35, Sweden's JAS-39, France's Dassault Rafale, Lockheed's F-16, Boeing's F/A-18 and the Eurofighter Typhoon, made by a consortium of British, German, Italian and Spanish companies.
The ministry set a deadline of next March 3 for the bids.
Typically, the procedure that follows the bids includes technical evaluations and approvals by various committees and the Cabinet before a firm order is made.
"Defense Ministry officials say it will take five to seven years (to place the order). I think it would take even longer," said Rahul Bedi at Jane's Defense Weekly.
The government took nearly two decades to decide on its last major purchase for the air force _ a US$1.3 billion order for 66 British Hawk training jets in 2003.
"A lot of these decisions are also influenced by larger political and strategic concerns," Bhaskar said.
The fighter jet deal comes at a time when Indian critics are railing against the government's moves to forge closer ties with the United States.
This is the first time India has shown an interest in buying fighter jets from American companies. Its air force mostly flies Russian-made MiG fighters, British Jaguars and French Mirages.
The 211-page request for bids from the Defense Ministry left open the possibility of either a winner-take-all competition or a chance for multiple vendors to receive awards.
Even if the government overcomes political hurdles, the fighter jet deal could still stall because of its size and the complicated nature of technical issues that would need to be addressed, Bedi said.
Under the purchase conditions, the first 18 planes would be built outside of the country, while the remaining 108 would be manufactured in India under a technology licensing agreement.
Hammering out a license agreement "is going to be a nightmare," Bedi said. "India has never done anything like this before."
The Defense Ministry is also requiring the chosen companies to spend at least 50 percent of the contract money in designing, technology development, co-production and related activities in India, under what is called an offset policy.
In the past, companies such as Boeing have expressed reservations about India's current policy offsets and wanted them to be made more flexible.


Updated : 2021-05-11 02:59 GMT+08:00