Sunday, May 1, 2011

India Rejects, US, Russia on $11bn fighter contract

Decision stuns US, the front-runner because of its intensive efforts to woo India's defense establishment

India used to be a proud leader of the old Non-Aligned Movement (NAM), standing notionally between the US and Soviet blocs, but always tilting towards Moscow.

It is therefore both apt and heartening to hear today reports that the government is taking a truly NAM-style route on an $11bn contract for fighter jets by rejecting bids from both America's Lockheed Martin F-16s and Boeing F-18s and Russia's MiG-35s.

This is a diplomatically brave decision that most observers never expected after India signed its nuclear power deal with the US in 2008. Numerous US officials from President Barack Obama downwards have lobbied hard for the $11bn multi-role combat aircraft (MRCA) contract, indicating that it was expected as a nuclear thank-you.

What seemed most likely therefore was that Lockheed or Boeing would be included – even though, as India knows, its supplies are unreliable – until the end of the process. Then the US would not give up until it had driven other bidders out of the contest.

The US offerings however did not match up to required standards during flight testing – nor did the MiGs. The F-18 failed tests in the cold and high Himalayas of Ladakh, and the F-16, flown by Pakistan, is long in the tooth. The Griffin fighter from Saab of Sweden has also been rejected.

The contest is now between Typhoon jets (above) from the four-nation EADS Eurofighter consortium (Germany, Spain, UK and Italy) and Rafale from Dassault of France. India's MoD is believed to have been impressed with the Typhoon, while the IAF has strong links with Dassault, whose Mirage fighters have been successfully in service in India since the early 1980s and are now being upgraded.

Rejection of the US companies therefore shows a degree of sophisticated detached decision-making from the Ministry of Defence's minister, A.K.Antony. Together with his senior acquisition officials, he seems determined to clear a logjam of pending defence contracts, and to do so in a way that shows rare integrity in a country that has become internationally infamous for widespread corruption. The "clean" record of Antony, and of at least some of his top officials, is important because there are bound to be allegations of corruption, especially since there was a scandal in the early 1980s over the Mirage deal.

Curiously the US ambassador to India, Timothy Roemer, chose today to announce his resignation – "for personal, professional and family considerations". That is being widely interpreted as a reaction to the loss of the MRCA contract, as well as the failure of the India-US nuclear deal to generate increased defence co-operation between the two countries, plus nuclear power plant contracts for US companies.

However, I am told that Roemer's resignation has been expected for some weeks because, as a senior Democratic politician, he is returning to the US to work on Obama's re-election campaign. If that is so, it was surely silly to announce the departure today.

Billion $ sops
In any case the defence industry expects sops to be announced for the US very soon, notably a $5bn order for ten Boeing C-17 heavy-lift transport aircraft with an additional order for a further six aircraft, both being placed through the negotiated government-to-government foreign military sales (FMS) route without competitive tenders. Lockheed is also expected to receive further negotiated orders for its C-130J Hercules transport aircraft, six of which are already contracted. Russia might be disappointed that its MiGs have been rejected, but it already has substantial orders for current and future jet fighters.

Despite the personal and political angle for his departure, Roemer cannot have helped America's cause when he was reported recently by WikiLeaks saying the India's aerospace industry was "two to three decades behind the US and other western countries", adding that Hindustan Aeronautics (HAL), the government's aircraft manufacturing company, was "untested and suspect" as a partner for advanced aircraft. All that is true but it must have upset HAL and the defence establishment.

However, to come back to my main point, the decisions do show an unexpected independence from US influence that had not been expected when the nuclear deal was struck. It has not been a good year so far for India with all the current corruption scandals, but this indicates that, in international diplomacy, it is keeping the US firmly in its place.

John Elliott for Asia Sentinel

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