Tech Offers Shape India's Jet Picks

Willingness to transfer technology likely helped the multinational Eurofighter Typhoon and French Dassault Rafale emerge as the short-listed rivals for India's Medium Multi-Role Combat Aircraft (MMRCA) program, observers said, although at least one U.S. official said the Indian Air Force's technical requirements were the deciding factor.
The Indian government has not even formally announced the downselect, let alone explained why it ruled out the Swedish Saab JAS-39 Gripen, the Russian MiG-35, and two U.S.-built jets, the Boeing F/A-18E/F Super Hornet and the Lockheed Martin F-16IN Super Viper, from the $10 billion, 126-aircraft program.
Instead, the news was passed April 27 to the jet-makers' national governments, irking at least some U.S. industry players.
"The way the decision was made and announced has only made things worse: The [government of India] knew full well the importance the administration attached to this sale. A quiet intimation of the coming decision would have helped considerably. It was really unfortunate that this was not done," said Ashley Tellis, an analyst at the Carnegie Endowment for International Peace in Washington.
A Indian Defence Ministry source said the decision was based on technical evaluations and flight tests, not political considerations or influence. Defence Minister A.K. Antony insisted that the selection be based on merit alone, the source said.
A senior Defence Ministry official said India will next open negotiations over technology transfer and price with the remaining bidders, a process that could last all year.
Several analysts said that while the U.S. had allowed its jet makers to offer unprecedented access to technology, European contenders probably pledged more.
"The most likely explanation is that the Europeans wanted and needed it more. They were willing to bend over backwards in terms of technology transfer, in terms of industrial work share and in terms of other regulatory issues, and they really needed this," said Richard Aboulafia, an analyst at the Teal Group, Fairfax, Va. "For the U.S. contractors, it would have been gravy, but for the Europeans, it's survival through the end of the decade."
Byron Callan, an analyst at Capital Alpha Partners in Washington, agreed about the stakes, but also said the U.S. companies' loss augurs poorly for their chances in Brazil's fighter competition.
Others disagreed about the role of tech-transfer in the Indian decision.
Tellis said the choice merely reflected the Indian Air Force's (IAF) technical preferences.
"The down-select decision clearly represents the IAF's choice, which the MoD has obviously gone along with as expected," he said.
One senior U.S. administration official agreed.
"I wouldn't see the technology release issue as the clincher," he said. "This was a judgment made on the basis of the technical qualification requirements that the Indian Air Force had established as part of the procurement."
He said the two U.S. aircraft had failed to meet certain Indian technical criteria.
"India would have been well-served to take a more comprehensive look at the transaction," he said.
But the official also conceded there were certain technologies that the U.S. simply would not share.
"We have a defense licensing system which is consistent with the law of the land, and there are certain technologies we're simply not going to hand over. That's just a fact of life," he said.
Boeing disputed the assertion that the F/A-18E/F did not meet Indian technical requirements.
"We believe we offered the Indian Air Force a fully compliant and best-value multi-role aircraft for the defined mission," the company said in a statement.
Indeed, many analysts considered the Boeing entrant to be among the most technologically capable of the rivals, as well as offering the favored twin-engine configuration.
"The F/A-18, that surprised me," said Douglas Barrie, an analyst with the International Institute for Strategic Studies in London. "My side bet for the program would have been the Rafale, Typhoon and F/A-18E/F making it to the down-select."
One U.S. industry official noted that Indian officials had publicly asserted that viable contenders would have an operational active electronically scanned array (AESA) radar, something only the F/A-18/E/F and F-16IN possess. The European contenders are developing AESA arrays.
"Yet, it seems that the IAF and MoD made the decision based on strategic, political grounds, not technical merits," the official said.
Several analysts said India has not forgotten that the U.S. imposed sanctions on the country after a 1990s nuclear test, nor that Washington is working to bolster ties with arch-enemy Pakistan.
For the U.S. government, which has placed an enormous stake on securing a strategic partnership with India, the short-list decision comes as a bitter pill.
"We are reviewing the documents received from the Government of India and are respectful of the procurement process," U.S. Ambassador Timothy J. Roemer said. "We are, however, deeply disappointed by this news. We look forward to continuing to grow and develop our defense partnership with India."
Roemer's comments were echoed by the senior U.S. administration official, who noted that the country's relationship was far deeper than one transaction. He noted that India had purchased U.S. weapons worth billions of dollars in recent years, including C-130J and C-17 airlifters and P-8 maritime patrol aircraft.
The official said the Indian bureaucratic system does not know the American system particularly well, which undermines its confidence in the U.S. as a reliable supplier. Over time, the official said India's faith in the U.S. would grow stronger.
"The logic of the U.S.-India relationship is as compelling today as it was on Tuesday in Asia and beyond," he said. "It's not the end of the world."
Bhim Singh, an analyst and retired IAF wing commander, predicted that the rejection of Boeing and Lockheed Martin wouldn't hurt bilateral defense ties.
But Tellis said there would be repercussions.
"I think the Obama administration will be deeply disappointed with this decision - as will the Congress. I think U.S.-India defense relations have been in trouble for a while. I suspect this will make things more difficult," he said.

The Rejected

Boeing has its Navy contracts for the Super Hornet and EA-18G Growler and other orders coming in from Saudi Arabia for the F-15, while Lockheed is shifting its focus onto the gargantuan F-35 Lightning II stealth fighter project.
But Saab needed the Gripen to win the Indian competition to remain in production; the aircraft has few other prospects beyond Brazil.
"They're dead in the water," Aboulafia said.
For the Russians, the MiG-35 loss to the Western contenders is was not entirely unexpected, Barrie said. The aircraft is based on the aging MiG-29 airframe.
Still, the Russians have a huge backlog of Indian contracts, including a deal to co-develop a new fifth-generation stealth fighter, and they acknowledge India's desire to diversify its supplier base. United Aircraft Corp.'s "cooperation with India is the widest of all countries and we understand that Indians do not want to keep all eggs in one basket and try to diversify suppliers," said an official from the Russian company.
Ruslan Pukhov, an analyst with the Center for Analysis of Strategies and Technologies in Moscow, agreed that the rejection of the MiG-35 in the MMRCA tender will not affect other projects.
"While Russia and India had bitterly quarreled over the cost of refitting of the Admiral Gorshkov aircraft carrier, it has not upset any other project," he said.
The Russians said the MiG met all of India's technical criteria.
Lockheed Martin and Saab acknowledged the Indian decision in written statements, while Boeing said, "We are obviously disappointed with this outcome. Our next step is to request and receive a debrief from the Indian Air Force."

India Rejects Russia's Fighter Jet Bid: Official

MOSCOW - Russia confirmed April 29 that India had rejected its bid to supply its traditional ally with 126 multi-role combat aircraft in a deal worth about $12 billion.
A spokesman for the Rosoboronexport agency responsible for foreign military contracts said India had informed Russia of the decision earlier in the week.

The official added that no formal explanation was given for the decision and that the choice "was the exclusive right of India".
The U.S. ambassador to New Delhi on April 28 said Washington was "deeply disappointed" that Lockheed Martin's F-16 and Boeing's F/A-18 Super Hornet had also been rejected.
India has made no official announcement but the U.S. and Russian confirmations indicate that only the Dassault Rafale fighter of France and the joint Eurofighter Typhoon project are still in the running.
Russia hoped its Soviet-era ally would settle on the MiG-35 - an updated version of the MiG-29 jet that is already being purchased by India.
The Stockholm International Peace Research Institute (SIPRI) identified India as the world's biggest arms purchaser between 2006 and 2010 and Russia had remained its main supplier throughout.
The two sides agreed in December on the joint production of a fifth-generation fighter with stealth capabilities in deal potentially worth up to $30 billion.
India is Russia's second largest military client behind China.

India Shortlists Rafale, Eurofighter for Jet Deal

NEW DELHI - India has shortlisted Dassault's Rafale and the Eurofighter Typhoon for a $12 billion dollar fighter jet deal, cutting out U.S. bidders from one of the largest military contracts of recent years.

A Eurofighter Typhoon aircraft (top) and a Dassault military jet Rafale are seen. India shortlisted the Rafale and the Typhoon for a $12 billion fighter jet deal on April 28, cutting out U.S. giants Boeing and Lockheed, sources said. (AFP FILE PHOTOS / PIERRE VERDY / PAUL ELLIS)

The U.S. embassy in New Delhi confirmed April 28 that Lockheed Martin's F-16 and Boeing's F/A-18 Super Hornet had both been ruled out of the running for India's planned purchase of 126 multirole combat aircraft.

Ambassador Timothy Roemer, who announced separately April 28 that he was resigning his post for personal reasons, said the U.S. government was "deeply disappointed" by the decision.
The long-delayed fighter jet deal has seen fierce competition between Boeing and Lockheed Martin, Sweden's Saab AB, France's Dassault Aviation, a European consortium with its Eurofighter Typhoon and the Russian makers of the MiG 35.
It was also the object of intense lobbying during visits to India last year by U.S. President Barack Obama, French President Nicholas Sarkozy and Russian President Dmitry Medvedev.
"It is confirmed Eurofighter and Rafale have been selected and the remaining four are off," a senior Indian defence ministry official told AFP.
"The grounds for their rejection have been individually conveyed,: said the official, who declined to be identified.
He added that the government hoped to sign the final fighter deal by March 2012.
Saab AB confirmed April 27 that it had been notified its JAS-39 Gripen fighter was no longer in contention.
The Eurofighter is made by the four-nation EADS, representing Germany and Spain, Britain's BAE Systems and Italy's Finmeccanica.
The contract includes the outright purchase of 18 combat aircraft by 2012 with another 108 to be built in India.
India, the biggest importer of military hardware among emerging nations, issued the request for proposals to the six firms in 2007 and trials of the aircraft competing for the deal began a year later.
In his statement, Roemer said he had been "personally assured" at the highest levels of the Indian government that the procurement process for the multirole fighter "has been and will be transparent and fair."
The procurement of the fighter jets is a key part of India's military modernization program, aimed at securing its borders against its traditional and emerging rivals Pakistan and China.
International consultancy firm KPMG estimates New Delhi will hand out military contracts worth $112 billion by 2016.

Raytheon Wins Army Deal for Excalibur Ia-2 Shells

PHOENIX - Tucson-based Raytheon Missile Systems has been awarded a $172.6 million contract to manufacture thousands of artillery shells for the U.S. Army.
The money will allow the company to start full-rate production of the Excalibur Ia-2, a longer-range shell than previous versions of the projectile.

According to the contract, Raytheon will provide the shells by the end of January 2013. Raytheon has been building the projectiles since 2007.
Excalibur is a 155-millimeter precision-guided artillery round that is in use with the Army and U.S. Marine Corps. It uses GPS precision guidance to come within about 30 feet of its target to limit collateral damage, Raytheon said.
Excalibur Ia-2 has a range of nearly 26 miles when fired from U.S. howitzers. The previous version, the Ia-1 has a range of 14 miles.
The projectiles give soldiers lifesaving options when close air support is unavailable, the company said, adding that more than 300 rounds have been fired in battle in the past year.
"War fighters need Excalibur because it provides a level of precision they simply cannot get with other artillery rounds," said Col. Michael Hartig, of the U.S. Army Fires Center of Excellence, in a statement.
He said the weapon's GPS precision is ideal for all types of terrain, including urban settings and areas where soldiers and Marines are close to the target.
In August 2010, the Army awarded Raytheon a contract to complete the design of the next generation: Excalibur Ib.
It is expected to leverage current technology but reduce costs by an estimated 50 percent.
Work for the contract will be performed in Tucson, 10 other U.S. cities, Sweden and the United Kingdom.

Swedish Parliament OKs 8 Jets for Libya Operation

STOCKHOLM - The Swedish parliament on April 1 voted in favor of sending eight Swedish fighter jets to contribute to the international mission to enforce a no-fly zone over Libya.
The vote clears the way for the Swedish air force's first international deployment in 48 years.

Swedish Prime Minister Fredrik Reinfeldt said March 29 he would put to parliament the proposal of sending eight Swedish-built fighter jets, a transport plane and a reconnaissance plane to Libya, stressing Swedish jets would not be involved in ground strikes.
Sweden's participation in the mission had received broad political support and the proposal was widely expected to pass.
The Nordic country is not a member of NATO, although it has been in NATO's Partnership for Peace program since 1994 and participates in the alliance's International Security Assistance Force (ISAF) force in Afghanistan with some 500 troops.
The country's air force has not been involved in action since 1963, in a U.N.-mandated operation in the former Belgian Congo.

India World's Biggest Arms Importer: SIPRI Report

STOCKHOLM - India has been the world's biggest weapons importer over the past five years, Swedish think-tank SIPRI reported March 14, naming four Asian countries among the top five arms importers.
The report also highlighted how the world's major arms supplying countries had in recent years competed for trade in Libya, and in other Arab countries gripped by the recent wave of pro-democracy uprisings.

"India is the world's largest arms importer," the Stockholm International Peace Research Institute (SIPRI) said as it released its latest report on trends in the international arms trade.
"India received 9 percent of the volume of international arms transfers during 2006-10, with Russian deliveries accounting for 82 percent of Indian arms imports," it said.
Its arms imports jumped 21 percent from the previous five-year period, with 71 percent of its orders being for aircraft.
India's arms purchases were driven by several factors, said Siemon Wezeman of SIPRI'S Arms Transfers Program.
"The most often cited relate to rivalries with Pakistan and China as well as internal security challenges," he wrote.
China and South Korea held joint second place on the list of global arms import, each with 6 percent, followed by Pakistan, on 5 percent.
Aircraft accounted for 45 percent of Pakistan's arms imports, which had bought warplanes from both China and the United States. Pakistan's arms imports were up 128 percent on the previous five-year period, SIPRI noted.
Greece rounded off the top-five list arms importers, with 4 percent of global imports.
Since the lifting of a U.N. arms embargo on Libya in September 2003, Britain, France, Italy and Russia had all competed to win orders from Moammar Gadhafi's regime, said the report.
Gadhafi's forces are currently using tanks, artillery and warplanes to reclaim territory held by the opposition forces.
Egypt had received 60 percent of its major arms imports from the United States between 2006 and 2010, said the SIPRI report.
They included "M-1A1 tanks and M-113 armored vehicles of the type present during demonstrations in the country in January 2011," it added.
A pro-democracy uprising forced Egyptian president Hosni Mubarak to step down on Feb. 11, after nearly three decades of autocratic rule, after pro-democracy uprising.
But the conflict left at least 384 dead and more than 6,000 injured.
Russia, Montenegro, the Netherlands and China had also supplied weapons to the Mubarak regime, said the SIPRI report.
The United States remained the world's largest military equipment exporter, accounting for 30 percent of global arms exports in 2006-10, 44 percent of which went to Asia and Oceania, SIPRI said.
The rest of the top five arms suppliers were: Russia, with 23 percent of the total market; Germany (11 percent); France (7 percent); and Britain (4 percent).
"There is intense competition between suppliers for big-ticket deals in Asia, the Middle East, North Africa and Latin America," said Dr Paul Holtom, head of the SIPRI Arms Transfers Program.
He cited the efforts of the Eurofighter consortium to sell their plane across the world against rival warplanes, with competition particularly fierce for the markets in Brazil and India.
Britain, France, Germany and Italy were also competing for orders for naval equipment from Algeria, noted SIPRI.
The think tank, which specializes in research on conflicts, weapons, arms control and disarmament, was created in 1966 and is 50 percent financed by the Swedish state.

Sweden Halts Arms Deliveries to Two Mideast States: Official

STOCKHOLM - Sweden has halted weapons deliveries to two countries in the Middle East and North Africa due to the unrest sweeping the region, the head of a government agency said March 9, refusing to name the countries in question.
"We have withdrawn licenses (for weapons exports) to two countries ... due to the situation in the region," Andreas Ekman Duse, the head of the Swedish Agency for Non-Proliferation and Export Controls (ISP), told AFP.

"We cannot say which countries, due to commercial and diplomatic classified information," he said.
His agency, which controls Sweden's exports of military equipment, would closely watch the situation, and the licenses could be restored "if the development in these countries goes in a democratic direction," he said, adding "when that will happen I cannot say."
ISP meanwhile also announced March 9 that Sweden last year saw its military equipment exports rise 1 percent to 13.7 billion kronor (1.55 billion euros, $2.16 billion).
Around 70 percent of that went to the European Union, the United States and South Africa, with the number boosted by a larger order of 90 tanks to the Netherlands and Sweden's ongoing deliveries of JAS 39 Gripen fighter jets to South Africa.
Another 20-some countries accounted for the remainder of exports, and the Scandinavian country for instance raked in 804 million kronor from weapons sales to the United Arab Emirates and 246 million kronor from sales to Saudi Arabia, ISP said in a statement.