Magazine article National Defense

U.S. Defense Companies Eye Partnerships in India

Magazine article National Defense

U.S. Defense Companies Eye Partnerships in India

Article excerpt

As India pours billions of dollars into upgrading its military, U.S. defense contractors are looking to establish partnerships in the region to grab a piece of the pie.

India - a country of more than 1.2 billion people - is currently in the midst of a major public relations campaign to encourage foreign companies to partner with Indian companies or build offices in the region. Known as "Make in India," the campaign has been a tenet of Indian Prime Minister Narendra Modi's administration.

"The intention is to boost production of defense hardware that is made in India. A 20 to 25 percent reduction in imports can result in up to 120,000 skilled jobs in India," said Janesh Janardhanan, Frost & Sullivan's associate director of consulting for the Middle East, North Africa and South Asia public sector and defense division.

Make in India has led to major contracts, he said.

"The Indian Ministry of Defense has already issued licenses and cleared deals worth several billions of dollars," he told National Defense in an email.

That includes a $700 million contract for BAE Systems' M777 howitzers; $2 billion for an Airbus-Tata transport plane manufacturing deal that would provide the Indian Air Force with 56 planes; and a $700 million contract with Russia's Kamov to establish a partnership with Reliance Defence to build 200 light helicopters for the Indian Army, Janardhanan said.

It is expected that the Indian government will spend $620 billion by 2022 on defense, he said. The country needs to upgrade nearly 50 percent of its equipment.

As India bolsters its military, it is also strengthening its relationship with the U.S. government.

During an April trip to India, Secretary of Defense Ashton Carter said: "The U.S.-India relationship is destined to be one of the defining partnerships of the 21st century."

The two countries plan to strengthen their ties. One example is through the expansion of the Defense Technology and Trade Initiative, Carter said. The initiative was established in 2012 "to leverage the convergence between our industrial and technological inabilities in an unprecedented way," he said. Programs that came out of that included work on a new Indian aircraftcarrier, he noted.

Carter announced during the trip that the two countries had agreed to initiate two new DTTI Pathfinder co-development projects, including a digital helmet mounted display and a joint biological tactical detection system.

Additionally, India and the United States would be collaborating on more science and technology programs, he said. The governments are finalizing four projects that are worth nearly $44 million, with both countries sharing the investment equally, he said.

These include a project on atmospheric sciences for high-energy lasers; another on cognitive tools for target detection; a third on small, intelligent, unmanned aerial systems; and a project on blast and blunt trauma brain injury, Carter said.

Both countries also plan to work together in the maritime area, he said. There are plans for more complex exercises. Further, India and the United States agreed to launch a bilateral maritime security dialogue, Carter said.

Analysts interviewed by National Defense agreed that India would be a source of business opportunities for U.S. defense contractors.

"India's mid-term positioning would be to be a valuable part of the global supply chain for defense majors," Janardhanan said. "India is a very large defense market, and several U.S.-based companies are looking to gain [a] share of this market. Similarly, Indian companies wish to form partnerships not only to address the Indian opportunity, but also be part of the international value chain."

Jon Grevatt, IHS Jane's Asia Pacific defense industry analyst, agreed that there were opportunities to be had.

"In terms of funding, we only see that India's defense market will expand over the next few years," he said. …

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