India: Jet Fighter Business Games

November 6th, 2011
in econ_news

by Sanjeev Kulkarni

fighter-planes Econintersect: On November 2 The Economics Times reported the U.S. has offered India partnership in the development of the world's most advanced flying machine, the F-35 Joint Strike Fighter, months after losing a lucrative $10 billion contract for 126 war planes.

According to Lockheed Martin, The F-35 Lightning II is the "only 5th generation multirole fighter and costs $65 million in 2010 prices. A total of 3140 fighters are planned to be delivered to Italy, Netherlands, Turkey, Australia, Norway, Denmark and Canada besides US.  But that is not the end of the story.  It appears that the U.S. simply may have been trying to foresatll the bidding process from which they had just been eliminated.

Follow up:

Reuters reported on November 3 that India announced they were only considering bids from European companies for the next fighter plane contract.  From Reuters:

The Indian government will open bids on Friday for a $11 billion contract to buy fighter jets for India's air force, a defence ministry source said, moving closer to awarding one of the world's biggest arms contracts to one of two European groups.

Two European contenders are left in the race to sell India 126 fighter jets and help revamp the country's creaking defence equipment in line with its rising global clout. American, Russian and Swedish bids were rejected in April.

"A meeting is scheduled tomorrow for the bids," the source told Reuters by phone, adding that it may take two-three weeks to pick a winner.

Still in the fray are Eurofighter, which makes the Typhoon fighter jet and is a four-nation consortium of EADS, representing Germany and Spain, Britain's BAE Systems and Italy's Finmeccanica.

Their competitor is France's Dassault, which makes the Rafale plane.

Military aircraft for India will be a big business in the coming years. India has joint partnership with Russia for the Sukhoi 30 Mk1 fighter. A total of 159 out of total order of 272, are already in service as of June 2011.  The Sukhoi 30Mk1 has been jointly developed by Russia's Sukhoi and India's Hindustan Aeronautics Limited

India is reportedly planning to spend $80 billion by 2015 and a whopping total of $200 billion in the next 12 years, from another news item published in Defence News India.

Sources:

US offers India partnership in development of Joint Strike Fighter: The Economics Times

F-35 Lightning II Program Status and Fast Facts: Lockheed Martin

Sukhoi Su-30MKI: Wikipedia

India's Ambitious Defence Policy Aimed At China - Not Pakistan: Defence News India

Indian Air Force: Wikipedia

New contract:  Reuters









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