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US dictating India's big defence deals?

February 20, 2010 20:02 IST

Is the government under pressure from the United States to cancel fat defence orders to the European companies and go for purchases from the American firms?

The question is being raised after Union Defence Minister A K Antony recently struck down a $1.6 billion order bagged by the European Aeronautic Defence and Space Company for supply of the Airbus transport planes to the Indian Air Force.

This was yet another order legitimately won by an European defence company last year with IAF selecting the multi-role tanker transporter  Airbus A330 after four years of labour to pick up the best suiting its  needs, but arbitrarily cancelled by Antony without giving any reason.

Last year, a concluded deal for 197 helicopters from Eurocopter, a French-German conglomeration, was similarly cancelled by the defence ministry, which gave a very dodgy financial argument to explain why Boeing's P81 Poseidon reconnaissance aircraft was preferred over Airbus in another deal.

Another decision to award a large tender for the secured defence communication to Motorola, an American firm, over EADS, is also mired  in red tape and secrecy, with no explanation coming forward from the  defence ministry for dumping the winner to oblige an American firm.

Those in the IAF who laboured for four years to finally pick up Airbus A330 are disturbed over the defence minister using his red pen to strike down the contract as their efforts, energy and money incurred went down the drain, leaving unfulfilled the critical requirement of having the best to meet the defence needs.

IAF sources say the choice of A330 over the Russian Ilyushin (IL86) was made on the basis of wanting a new generation product instead of going for an existing obsolete product. Though the price quoted by the Russian aircraft manufacturer was lower than that of A330, the IAF opted for the latter, the former rather cheaper on the ground of taking the totality of the life-cycle cost over 30 years.

Defence analysts say there may not be a great conspiracy but there is certainly something wrong in the way the defence ministry is cancelling  deals with the European companies despite winning the tenders and  standing up to quality requirements of the Indian forces.

They point out that concluded transactions between sovereign nations do not just get cancelled.

The pertinent questions are being raised as to whether the Manmohan Singh government is succumbing to the continued American pressure as quid-pro-quo for the civilian nuclear deal.

Or, are there some shadowy agents who are influencing the government's decisions?

Analysts say Antony cannot be blamed for cancellation of the concluded deals as he must be acting only on the advice of the top officials in the defence ministry and hence they wonder if some of them have been compromised so much that there is a blatant rejection of anything that is not coming from either the United States or its crony Israel.

There are no answers from the defence ministry as to why are the
Europeans, and especially France, are being denied business that they won through open competition. What extraneous factors are at work?

France President Nicholas Sarkozy led a sustained and aggressive diplomatic campaign over the past couple of years to regain and revive the strategic relationship between Europe and India. He must be also at a loss to understand this phenomena.

Analysts point out that unlike the United States, the European firms have always agreed for full transfer of technology of the latest weaponry, and that too, with no strings attached and hence denial of opportunity to them is astounding.

Is it all because the United States helped India get into the nuclear nations' family after over two decades of isolation that the same India, that would not buy a pin from the US a decade ago if it had any sort of military application, is bending backwards to have first preference for the American supplies.

Post-nuclear deal, the United States appear sitting pretty on actual and potential defence orders worth US $10 billion from India, and these include F-16 and F-18 multi-rope combat Falcons that may dominate India's front line air defence umbrella by next year.

Other deals that appear to be falling in the American kitty include military transport aircraft like C130J and C-17, reconnaissance and surveillance aircraft, helicopters, naval vessels, Patriot or other missiles and armoured vehicles.

Analysts say buys from the United States have implications of strategic deterrence and cost to the taxpayer, particularly because the American firms never transfer critical technology, have intrusive clauses inbuilt in every contract and the US government always holds the threat of sanctions for use of the American weapons and technology that do not suit the American interests.

A Correspondent in New Delhi