Friday February 20, 2009

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By Sam Devraj  ( Assistant Editor )

Lockheed eyes share of India defence upgrade

US-BASED Lockheed Martin Corporation, one of the world's largest defence companies, says it is aiming for deals with India worth $15bn (£10.5bn) in the next five years.

Lockheed last year sold six C-130J military transport planes to India for about $1.1bn (£700,000), India's biggest arms deal with the US.

The sale was seen by analysts as a sign of growing ties between Delhi and Washington and the reversal of a decades-old reliance by India on Soviet or Russian equipment.

India is now looking to modernise its largely Soviet-era weapons systems and, according to Douglas A. Hartwick, chief executive officer of Lockheed's Indian operations, it could be spending $30-40bn (£28bn) a year on defence within five years.

"You are talking about real money after a while," Hartwick said yesterday.

He told reporters that Lockheed was focusing on winning contracts for multi-role fighter aircraft, military transport aircraft, naval helicopters and missiles.

"We will pursue defence deals worth $15bn (£10.5bn) and growing leading up to the next five years," he said.

Six international companies, including Lockheed, have submitted bids to supply India with 126 multi-role fighter jets.

Fighters made by Boeing Co. along with Russia's MiG-35, France's Dassault Rafale, Sweden's Saab KAS-39 Gripen and the Eurofighter Typhoon - built by a consortium of British, German, Italian and Spanish companies - are all in contention for the more than $10bn (£7bn) contract.

LEGAL OBSTACLES

A legal clause that allows US inspectors to monitor arms it sells to New Delhi is proving to be an obstacle for the two US companies bidding for the deal.

Hartwick, a former US diplomat said the US Congress and the government should work together to solve the issue.

"It is important for the United States, not just the government, but the U.S. Congress to work hand in hand on these issues," Hartwick said.

"The US is looking for a clear-cut, top quality assurance that technologies released to whoever our partners are, will be as protected as it were in the US," he said.

India is talking to the United States on 'end-use monitoring' under which the US reserves a right to make sure US arms sold abroad are not passed to third countries.

Senior Indian defence officials have told reporters that the US could satisfy India by not implementing a provision that allows physical verification of equipment. But India could agree to give regular briefings to the US.

Hartwick said a breakthrough could be in sight for early next year, but Lockheed would still go ahead with its India plans and is already talking to potential partners for research and technology development.

"We are talking to some of India's industrial best to come up with ideas and partnerships that have long-term potential for Lockheed and long term potential for India," Hartwick said.

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