US secretary of state John Kerry’s three-day India visit that began on Sunday could herald the clinching of a series of military hardware deals worth billions of dollars between New Delhi and American defence corporations. India, which spent $40 billion for defence procurement in the three years up to 2011-12, has lined up capital expenditure of another $100 billion by 2021-22 to modernise its armed forces. Washington eyes to get a large share of this market.
Besides pushing strategic defence sales to New Delhi, Kerry’s visit is also aimed at bringing closure to the Indo-US nuclear deal, sources said.
New Delhi is expecting to seal deals worth billions of dollars for helicopters, howitzer guns, weapons systems and platforms with the US. Several deals through the foreign military sales (FMS) route are in the pipeline and expected to be finalised in 2013-14. Six C-130 J special operations aircraft from Lockheed Martin, valued at $1.2 billion, have already arrived in the country and an order for six more is in the offing. India is also planning to place an order for M777 ultra-light howitzers for $700 million from BAE Systems US. Also shortlisted are 22 Boeing Apache Longbow strike helicopters ($1.2 billion), 15 heavy-lift Boeing CH Chinook helicopters ($1.4 billion) for the Indian Air Force.
On Monday, Kerry will co-chair the Indo-US strategic dialogue with external affairs minister Salman Khurshid and would also meet Prime Minister Manmohan Singh. He also has a meeting scheduled with HRD minister Pallam Raju on Tuesday to explore cooperation in the area of higher education.
According to Boston-based foreign policy and strategic affairs expert Matthew Hoey, “For the US, a slot among the top arms exporters to India would be possible if the last remaining export controls between India and the US defence industry are removed.”
He added, “India’s desire to purchase the means to enhance their logistical capability have been attained in part by closing a deal in 2008 to purchase six C-130 Hercules military transport aircraft valued at nearly $1billion.”
A person aware of the matter told FE: “Talks are on for a follow-up order for six more C-130J from Lockheed Martin. Orders for three have been placed. Also, the IAF is expected to get 10 Boeing C-17 Globemaster III heavy-lift aircraft at $5 billion. The delivery of the aircraft is scheduled between June 2013 and June 2015. Like in the case of C-130J, the IAF also plans to increase its C-17 fleet by 10 more such planes.”
Some big-ticket deals procured from the US in the last five years include the $2.1-billion contract for eight P-8I maritime surveillance and anti-submarine warfare aircraft from Boeing. In 2011, military sales from the US to India touched $ 4.5 billion and total military trade with that country in 10 years has touched $10 billion from near zero.
On the eve of Kerry’s visit to India, Andrew Shapiro, assistant secretary of state for political-military affairs, reportedly said that in addition to sales already in the pipeline, "We think there’s going to be billions of dollars more in the next couple of years." In his comments, Shapiro referred to deputy secretary of defence Ashton Carter who, he said, was heading up an arms sales initiative "which we think is making some good progress and will, hopefully, lead to an even greater pace of additional defence trade with India".
Kerry will also push the nuclear deal as the US wants to bring it to an early closure. The US is keen to finalise the early works agreement on nuclear reactors and settle the liability issue so as to clear the decks for actual nuclear commerce to begin.
Bilateral trade with the US is currently estimated at $ 60 billion, and once the deal is implemented it will boost the economic relationship between the two countries.