By Pratap Chakravarty (AFP) – Oct 25, 2010
NEW DELHI — Arms-hungry India is expected to hand out a raft of military deals worth billions of dollars during an upcoming rush of presidential visits from the United States, France and Russia.
The biggest-ticket item is the scheduled signing of an estimated 30 billion-dollar stealth fighter co-production agreement when Russian President Dmitry Medvedev visits in late December.
Medvedev's trip will follow those of President Barack Obama and President Nicolas Sarkozy, both of whom will be pushing existing US and French tenders for lucrative military contracts.
Fuelling India's drive into the international arms market are growing concerns over China's military strength and its expanding sphere of regional influence.
"China would like to have a foothold in South Asia and we have to reflect on this reality," Indian Prime Minister Manmohan Singh warned in September.
"There is a new assertiveness among the Chinese. It is difficult to tell which way it will go. So it's important to be prepared," Singh said.
India and China fought a brief but bloody war in 1962 and border disputes remain unresolved despite many rounds of talks and improved economic ties.
"China is becoming more of an issue in India," said Siemon Wezeman, analyst from the Stockholm International Peace Research Institute.
"The word 'threat' is now repeatedly used when officials talk about China, and Indian military strength along the disputed India-China border has been significantly increased, as has that of the Indian navy," Wezeman told AFP.
The staggered visits by the presidents of three top military powers come as India's defence sector is about to embark on what global consultancy firm KPMG described as "one of the largest procurement cycles in the world."
Between now and 2016, India is expected to spend 112 billion dollars on capital defence acquisitions, which will in turn create opportunities for domestic industry worth 30 billion dollars, KPMG said in a report published last week.
"These visits are driven by the opportunity of profiteering," said Alex Neill, an analyst with Britain's Royal United Services Institute (RUSI) think-tank.
"There is a global financial depression and the US and Russian interests in selling to the Indian military sector are driven by the commercial opportunity available," Neill said.
Wezeman, however, sounded a note of caution, citing India's notorious reputation for arms deals that can take years to come to fruition.
"Indian procurement is a slow process, and while Indian officials keep saying that decisions are close, often massive delays occur," he added.
US firms are hoping to pick up 10-12 billion dollars in contracts or assurances during Obama's trip in early November, including India's purchase of 10 Boeing military transport planes for around 5.8 billion dollars.
European aerospace giant EADS, which makes the Eurofighter, is competing with five other aeronautical firms from the US, Russia, France and Sweden to sell 126 fighter jets to India for 12 billion dollars next year.
"President Sarkozy's visit (in December) will definitely help European companies which are doing business here," Marie-Agnes Veve, CEO of the Indian arm of EADS unit Eurocopter, told AFP in New Delhi.
EADS is looking to sell 197 helicopters worth 600 million dollars to India, while France hopes to clinch a 2.1-billion dollar deal to upgrade India's Mirage-2000 jets.
Medvedev's visit will be capped by the scheduled signing of the pact to co-produce 250-300 stealth war jets by 2020.
Moscow-based analysts say the project has come as a life-saver to Russia's cash-strapped armament companies.
"Russia needs the Indian money like it needs air to accelerate the production of fighter jets for its own military," said Ruslan Pukhov, head of the Moscow-based Centre for Analysis of Strategies and Technologies.
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