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http://www.financialexpress.com/fe_f...tent_id=139975

A $9 bn dogfight in Indian skies

HUMA SIDDIQUI
Posted online: Sunday, September 10, 2006 at 0058 hours IST

NEW DELHI, SEPT 9: New Delhi’s plan to buy 126 multi-role combat aircraft for the Indian Air Force (IAF), replacing the ageing Russian MiG fleet, has leading global defence vendors from Moscow to Seattle, Paris to San Diego readying their best offers to bag a share in the estimated $9-billion order, the biggest in over a decade for the small world of fighter jet makers.
Leading the fray are MiG (short for Mikoyan Gurevich), with its MiG 35, and Boeing’s F-18 Super Hornet fighter, closely followed by Lockheed Martin marketing its F-16F Desert Falcon, Germany’s Typhoon of Eurofighter and the French Rafale. This is the first time US fighter jet vendors are participating in an Indian order. Feeding the rush is IAF’s clear intention to wrap up this giant order — key to the force because the new fighters will form the backbone of the service for two to three decades - through a fast-track procurement policy before the end of March 2007.

According to chief of air staff Air Marshal S P Tyagi, the IAF will float a request for proposals (RFP) for the fighter jets “very soon” and suppliers be given six months time to close the deal. Once the choice is finalised, the first lot of about 20 jets would be acquired within 42 to 54 months, and the rest would be made in India.
Under the new guidelines, 30% of the total cost of any deal worth over $70 million will be used as ‘offsets’, which means that the foreign vendor will have to buy defence or procure other specified equipment locally from Indian suppliers.

With this offset clause, manufacturers, including Boeing, EADS and Lockheed Martin, moved in to develop their activities in India only last fortnight. Boeing, which is offering its F/A-18E/F Super Hornet, plans to set up a $100 million maintenance, repair and overhaul facility in Maharashtra, while EADS has promised a training and engineering operations in a yet-to-be-decided Indian location.

Boeing has, for the first time, entered into a “dialogue” with the IAF on the innumerable options it has to offer, Chris Chadwick, vice-president of its F/A-18 programme, told FE. Chadwick adds that the Hornet Industrial Team (GE, Raytheon and Northrop) are exploring investment opportunities in military, biotech, IT and aerospace sectors in India.

Lockheed Martin plans to partner Indian companies this year to meet its offset requirements, say its officials. “We are anxious to get on and compete,” says Royce Caplinger, managing director of Lockheed Martin. “The

IAF has the Mirage and MiG-29 in its inventory and likes them, but the F-16 represents the latest and greatest the US has to offer. The platform may be old but the technology, weapon systems and cockpit are the latest.”

However, despite their impressive offers, the Indian defence establishment has reservations sourcing fighter jets from the US vendors. Many argue that the US, tied down by a tough sanctions regime, cannot be a reliable supplier.

“If you say you don’t trust the Americans for GE-404 engines (used to power India's indigenously developed Light Combat Aircraft), how can you trust them for a whole machine?” asks a scientist at the Defence Research & Development Organisation, requesting not to be named.

Adds former IAF chief S Krishnaswamy: “ The real concern, apart from the constant fear of sanctions, is the version of machines being offered.” For instance, Lockheed’s F-16 Fighting Falcon is an upgraded version of the F-16E Block 60 ‘Desert Falcon’ currently serving in UAE. The biggest disadvantage for India with the F-16 is, of course, that the Pakistan Air Force too flies them.

The Eurofighter Typhoon, a fourth-generation aircraft for air-to-air operations, popular for its characteristics and an excellent pilot interface, provides for a good contender for EADS. Apart from the F-22A Raptor, the Eurofighter is the next-best in-service air superiority aircraft worldwide (comparable with the SU-30MKI).

The JAS-39 Gripen (manufactured by Saab, Sweden and marketed by Britain’s BAE) is a true fourth-generation lightweight fighter, significantly more capable than category competitors like the F-16 and Mirage 2000.

Surprisingly, Dassault Aviation has withdrawn from the fighter RFP, deciding against fielding the Mirage 2000-5 despite the 40 Mirage 2000Ds already in the IAF fleet. “We are on the verge of closing the Mirage fighter assembly line and want to offer India a quantum jump in technology,” Chacks Edelstenne, CEO of Dassault Aviation, told defence ministry officials.

Given India’s long-standing association with the Russians, the MiG-35 has a definite edge in the IAF tender. “It has been decided we will take part in the tender for the purchase and license production of the multi-role combat aircraft in India,” MiG executives told Prime Minister Manmohan Singh during his Moscow visit last year.