New Delhi, July 15: New Delhi has junked a proposal from Paris to develop a missile defence system in a joint venture, despite Frances charm offensive that saw Indian soldiers leading the Bastille Day parade on the Champs Elysees on Tuesday.
A senior defence ministry source, when asked today about the defence deals that figured in discussions during Prime Minister Manmohan Singhs visit to Paris, said that a $500-million (Rs 2,430 crore) proposal from European missile maker MDBA to jointly produce low-level quick reaction missiles (LLQRM) or short-range surface-to-air missiles (SR-SAMs) was not happening.
Defence secretary Vijay Singh was a member of the Prime Ministers delegation.
A French defence delegation is expected to begin discussions with Indian officials in New Delhi tomorrow, mainly to negotiate an upgrade order for the Indian Air Force Mirage 2000 fighter aircraft. The order could be about euro 2 billion (Rs 13,700 crore).
MBDA is one of the largest missile makers in the world and operates out of France, the UK, Italy and Germany.
The joint venture proposal to make the Maitri missiles figured in discussions in January 2008 that Nicolas Sarkozy had with Manmohan when the French President was the chief guest at Indias Republic Day ceremonies.
The scrapping of the Maitri project may have worked to the advantage of Israel. In 2007, the Indian Air Force contracted 18 Spyder missile systems for about $395.4 million (Rs 1,800 crore) from Israel. Israeli company Rafael was the contractor with Israel Aircraft Industries (IAI) being the major sub-contractor.
But in May this year, IAI was blacklisted after defence minister A.K. Antony ordered action against all seven companies named in a CBI investigation into the deals by the former ordnance factory board director-general Sudipta Ghosh. Ghoshs houses in Calcutta were raided and he was arrested.
The defence ministry is now reconsidering its ban on the seven firms.
The Maitri missile project involved a technological collaboration between MBDA, Indias Defence Research and Development Organisation (DRDO) and defence public sector unit Bharat Dynamics Limited, the only company in the country that makes missiles.
The LLQRMS were to be designed for the navy and the air force, which are replacing their outdated OSA-AK Soviet-era missile defence systems.
India is the launch customer for Rafaels Spyder and the Israeli company is seeking to expand the market for it. Indias military is in need of at least 1,000 short-range surface-to-air missiles to protect installations and VVIP complexes.
The DRDO was also hoping to use its experience gained in working on the now aborted indigenous Trishul short-range missile project and marry it with the advance seeker and guidance systems from MBDAs MICA missile.
MBDA is a long-time supplier of missiles to Indias army, air force and navy. Earlier this year, the Indian Army ordered 4,100 Milan 27 anti-tank missiles that are also used for destroying built-up targets.