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A senior defense official said that India would release a tender seeking to buy 126 fighter planes valued at USD nine billion by mid-2007 and coveted by many giants of military fighter manufacturers. Secretary of Defense Production K.P. Singh said that was quoted by wire reports saying that the tender will be out "in the next six months." Boeing's F-18, Lockheed Martin F-16, Russia's MiG-29, and Swedish Gripen are considered fore-runners although French Rafael (next generation Mirage) and EU's Eurofighter are also being considered.
India has an annual defense budget of USD 20 billion and is on a major modernization drive to improve the quality and scope of its military in line with its growing economic might. As the largest arms buyer among emerging economies, India is a trying to break away from an earlier Soviet-focused buying practices targeting on co-production and instead looking at best of breed purchases.
Riddled with defense scandals, the Indian defense establishment now requires bidding companies and countries to sign a treaty promising not to bribe or pay commissions to middlemen when trying to sell their wares. They also want 30 percent of the value of the contract to be bought from local manufacturers. While some companies with smaller orders have been able to fulfill this condition, many foreign players have expressed doubts about this condition.
India is looking to develop competence in avionics and military private industry participation and sees these conditions as seeding such industry. Indian companies have already developed advanced avionics and software for automobile and commercial airlines and the government sees this as an extension to that experience. |
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