The Telegraph
Since 1st March, 1999
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Military majors locked in Delhi dogfight

New Delhi, Jan. 30: An Indian order for fighter aircraft that could run to $5 billion is titillating the global military industry and is set to be the talking point at the largest exhibition of arms and weapons systems ' Defexpo 2006 ' opening tomorrow.

Ironically enough for South Asia, the more India and Pakistan talk peace, the larger is the exhibition of arms and weapons in Defexpo. This year, the exhibition is being held on an unprecedented scale and Pragati Maidan, the international trade fair venue, will pack into its conical and cubical buildings more firepower for five days than has been spat out by the big guns on the Siachen Glacier in the last two years.

The reason for the large presence of global military majors is a change in India’s defence procurement policy alongside last year’s opening up of manufacture to private players.

In its procurement policy, the Indian government has said that for each import order worth more than Rs 300 crore, 30 per cent of the value will have to be “offset” ' meaning that much content has to be ordered from India’s own industry.

There is some ambiguity on whether the offset policy is equally applicable for public and private sectors but it has raised the possibility of joint ventures with a 26 per cent FDI cap.

Representatives of the world’s largest military equipment manufacturers reached Delhi today for Defexpo 2006 and have immediately set upon trying to influence policy-makers and win megabuck deals.

Unsurprisingly, several top-notch executives have packed in quick visits to Pakistan, too, during their tour of South Asia.

Ironical also is the fact that it is the Indian Air Force’s top brass that is the most sought-after in what is billed as a land and naval systems exhibition. Defexpo ' to which armies and navies from across the Indian Ocean region send representatives ' is held every alternate year.

For the air forces of the world, the airshow in Bangalore that alternates with Defexpo is an important draw.

Lockheed Martin and Boeing of the US are competing with SAAB of Sweden, and Dassault Aviation of France and RSK MiG Corporation have sent high-power delegations to the exhibition to win orders and influence people.

Air Chief Marshal S.P. Tyagi announced in Nagpur this afternoon that he expected the global tender for the IAF’s order of 126 multirole combat aircraft to be issued by the end of Defexpo this week.

Lockheed Martin, which is already in the middle of a high-decibel sales campaign, is also looking at the Pakistan market with Islamabad wanting to contract F-16 Fighting Falcon aircraft. The company’s delegation in Delhi led by Robert H. Trice made it clear that its sale of the aircraft was contingent on US government policy.

In the immediate background of US ambassador David Mulford’s controversial comments on India’s vote on Iran at the IAEA on February 2, Delhi’s military establishment that is circumspect because of past arms embargoes will be alerted.

But Trice said Lockheed is looking at India as a possible hub through technical collaborations for sales in the region. The company is more interested in technical collaborations than in joint ventures with foreign direct investment, he said.

Lockheed has through 2005 organised classified briefings for Indian officials on the F-16 as well as on missile defence.

The Swedish company SAAB, that is in the race for the IAF order with its Jas 39 Gripen aircraft, will be making its first major public appearance at Defexpo. It has tied up with British Aerospace to promote the aircraft in India.

Another surprise at the military expo is the displacement of the Russians for the largest presence. The UK will be represented by 30 exhibitors '- the second-largest after the US at the event. But as with the US, India has issues with the UK. British high commissioner Michael Arthur said today India’s proposed sale of an Islander aircraft to Myanmar could tell on the navy’s plan to replace Sea Harrier fighter aircraft that operate out of the carrier INS Viraat.

“There are European Union guidelines on dealing with Myanmar. That can have some lock-on effect on our ability to supply spares to the rest of the fleet,” he said.

The British high commission has written to the Indian government, requesting it not to go ahead with the offer made by the chief of naval staff and chairman of the chiefs of staff committee, Admiral Arun Prakash.

Arthur announced that a British aircraft carrier group would be reaching India’s west coast in May for exercises.

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