India's booming economy and growing security concerns are making it one of the top defence markets for the next decade.
US and European defence firms keen to sell to India
PARIS // India's booming economy and growing security concerns are making it one of the top defence markets for the next decade.
European contractors are deepening their ties to the country while US companies, which were barred from selling sophisticated equipment to India until 2005, are strengthening their presence.
It "is buying anything you can think of - fighters, patrol aircraft, missiles, trainers, aircraft carriers", said Stephen Trimble, a journalist who writes and blogs on defence matters.
"India is already one of the world's 10 largest arms buyers, and there is no reason to think that will change. If anything, if current trends continue, it's easy to see India outspending Europe's biggest spenders, such as Germany and perhaps even France and the UK, by the end of the decade," he said.
The US aircraft manufacturer Boeing forecasts India will spend US$30 billion (Dh110bn) on defence platforms such as aircraft over the next decade.
The country is estimated to import close to 70 per cent of its defence requirements from foreign companies, with Israel, Russia and the US among the top suppliers.
Just seven years ago Boeing would not have been able to sell a single missile to India because of the US administration's arm's-length relationship with India, said Mark Kronenberg, the vice president of international business development at Boeing Defence, Space and Security.
But following reforms initiated under the tenure of George W Bush's presidency and continued by his successor Barack Obama, including several confidence-building official state visits between the two nations, US contractors are set to reap huge deals.
Boeing is set to become of the biggest beneficiary of the improved relations with plans to sell C-17 heavy-lift transport planes, P-8 anti-submarine planes, Chinook transport helicopters and Apache attack helicopters.
"They have a significant acquisition budget that is growing at about a 7 to 8 per cent clip," Mr Kronenberg said.
With its economy racing ahead and its population expected to continue to increase until 2060, India is setting itself apart from other emerging nations, said Kevin Massengill, a vice president and regional executive for the Middle East and North Africa for Raytheon, a US contractor that hopes to sell sophisticated sensors and radar equipment as India looks to protect its borders.
"India booms from its own internal development," he said. "For the long-term play of 20 years and longer, India strikes me as world's emerging superpower.
"Like the US, India has a broad-based and at times fractious democracy. They are a maritime power with enormous coastlines, so there is a huge synergy between the US and India that we have yet to exploit."
It was not always so rosy for US companies.
Beginning in the 1960s, the Soviet Union dominated arms sales to India because of the strength of the bilateral ties. And since the 1950s India has also been a major customer of Dassault fighter jets. Dassault and another European jet, the Typhoon, are the two remaining rivals in a medium multi-role aircraft campaign for 126 fighters, estimated to be worth more than $10bn. The US was also at odds with India over its nuclear programme until Mr Bush's reforms.
The US has also been up against top technology from European companies. During the technical evaluation phase of the competition, India eliminated the US-made F-16 and F-18 fighter jets, in what some analysts said was a desire not to rely too much on US technology.