Global aviation giants race to meet Indian fighter deadline

Aviation giants are scrambling to meet a deadline to bid for a 12-billion dollar deal to sell 126 fighter planes to India, but tough arms purchase rules are dogging the global contenders.

Six aeronautical firms are expected to submit proposals by Monday for the contract, which includes outright purchase of 18 war jets by 2012. India also holds the option of buying another 64 fighters from the top bidder.

New Delhi called for the bids as the operational fighter fleet of its air force plunged to a low of 576 aircraft in 2007, from nearly 750 in early 2000.

Seattle-based Boeing, which is offering F-18 Superhornets, submitted its proposals on Thursday, a company spokesman said.

The European Aeronautic Defence and Space Company (EADS) said it also was ready to file the papers detailing its offers, which includes technology transfer and its Typhoon Eurofighter.

"In just a few days we will submit our proposals and EADS already has a head start," Bernd Muetzelburg, Germany's ambassador to India, said Thursday at an EADS road show.

The company, which suffered a setback last December when India scrapped a 600-million dollar deal for 197 military helicopters from Eurocopter -- an EADS unit -- put on a brave face.

"We want to send a message that we will deliver the bid proposals on time and that shall underline our commitment to India," Bernhard Gerwert, CEO of EADS' military wing, told aviation experts and diplomats at the road show.

US-based Lockheed Martin is pushing its F-16s to the technology-starved Indian air force. Russian MiG-35, MiG-29, Saab's Gripen and Dassault's Rafale and Mirage from France are also in the market.

Dassault has promised to supply 40 top-flight Rafale jets on a fast-track basis as part of the deal, while Gripen is offering larger technology transfers.

Douglas Hartwick, CEO of Lockheed Martin's Indian branch, was positive about his company's proposals, saying the "F-16 project will be the finest" and the Indian air force will be "extremely pleased with it."

Hartwick also said Lockheed was unfazed by India's arms procurement rules, called the offset policy.

"The offset policy is being reviewed and we look forward to the revision as we have made considerable inputs for that," he told AFP.

The policy stipulates that foreign firms selling products worth more than 600 million dollars must re-invest up to 50 percent of the total amount to build manufacturing capacity in India.

New Delhi introduced this clause into all its big defence deals in 2003 as a way of protecting itself from non-delivery and to boost the domestic arms industry.

The European consortium's Gerwert said EADS wanted to take ties with India beyond a buyer-seller relationship, but he conceded the purchase policy posed challenges.

"We are ready to meet these challenges and we will satisfy the expectations of our customers," he said.

New Delhi promised to revise the policy in April, leaving the global firms bidding for the fighter jet deal waiting to see what will change.

"We must submit our proposals by Monday, but the new policy is not yet out so we don't know what obligations we have to meet... Time's really running out," a top India-based representative of one of the six contenders told AFP.

Indian defence ministry sources said the new policy would give the contenders until August to fine-tune their offers on their spend-back obligations.

But EADS said it was concerned about the extent of the offset provisions.

"The main issue is whether this new offset policy would be confined to the defence sector or applicable to the entire aerospace industry," CEO Gerwert told AFP.

Pakistan tests nuclear-capable missile: army

by Staff Writers
Islamabad (AFP) April 19, 2008
Pakistan on Saturday test-fired a long-range ballistic missile capable of carrying nuclear and conventional warheads, the military said. The Shaheen II, or Hatf VI, missile with a range of 2,000 kilometres (1,280 miles) was launched from an undisclosed location, military spokesman Major General Athar Abbas told AFP.

"This was the second test of the missile since February last year," he added. Shaheen is the longest range missile that Pakistan has produced.

"The launch was very successful. It hit the target with complete accuracy," Abbas said.

The test was conducted as part of technical improvements to verify Pakistan's land-based strategic missile systems, the military said in a statement.

Pakistan's missile arsenal includes short-range, medium and long-range missiles named after Muslim conquerors.

Prime Minister Yousaf Raza Gilani witnessed the launch, Abbas added. It was the first missile test by the army since a new civilian government took power a month ago.

Gilani congratulated the scientists and engineers on achieving an important milestone in "Pakistan's quest for sustaining strategic balance in South Asia," the military statement said.

He told the gathering at the missile launch that Pakistan's strategy of credible minimum deterrence was a guarantee of peace in the region.

Gilani said the country's strategic programme will continue to be consolidated and further strengthened in line with the needs of national security.

South Asian rival Pakistan and India have routinely conducted missile tests since both demonstrated nuclear weapons capability in 1998.

US accused of pressing nations over cluster bomb treaty

by Staff Writers
Brussels (AFP) April 9, 2008
A leading group working on behalf of disabled people accused the United States Wednesday of pressuring European and African countries not to join a new treaty next month banning cluster bombs.

"Five weeks before the conclusion of the historic Cluster Munition Treaty, Handicap International urges states to resist the growing pressure from the United States and other arms producing countries," a statement said.

Cluster bombs are notorious for killing and maiming civilians. They contain smaller bomblets, which scatter over a wide area and can explode decades after a conflict has ended.

The treaty banning the weapons, which is opposed by China and Russia, is expected to be published in Dublin during an event involving almost 100 countries from May 19 to 30.

"We got evidence from a number of states they have been lobbied, sometimes very aggressively, by the US," said Stan Brabant, head of the non-governmental organisation's Belgian section.

He said African states had been threatened with losing aid from the United States if they signed up, while some in Europe were told such a ban could hurt the NATO military alliance.

He also accused Britain and the Netherlands -- which have used the munitions in Iraq and Kosovo -- of trying to weaken treaty provisions on helping the victims of such weapons.

Another group of countries was accused of trying to water down the treaty so as to exempt from any ban the cluster munitions that they produce.

No official records exist of how many people have been maimed or killed by the weapons, but Handicap International estimates that about 98 percent of victims were civilians, usually children.

The treaty is part of a Norwegian initiative launched in February 2007 when 46 states agreed to conclude an international ban treaty to be signed by the end of this year.

Cluster munitions are among the weapons that pose the gravest dangers to civilians since antipersonnel mines, which were banned in 1997.

They caused more civilian casualties in Iraq in 2003 and Kosovo in 1999 than any other weapon system. Israel's widespread use of cluster bombs during the 2006 war in Lebanon caused more than 200 civilian casualties in the year following the ceasefire, the Cluster Munitions Coalition has said.

US stepping up unilateral attacks in Pakistan: report

by Staff Writers
Washington (AFP) March 27, 2008

The United States has stepped up unilateral strikes against Al-Qaeda and foreign fighters in Pakistan's tribal areas, partly because of fears the country's new leaders will insist they be scaled back, the Washington Post reported Thursday.

The Pentagon declined to comment on the substance of the report, which said US-controlled Predator aircraft have struck at least three sites used by Al-Qaeda operatives over the past two months.

"Our operations with Pakistan are closely coordinated," said Bryan Whitman, a Pentagon spokesman. "Pakistan recognizes that we fight a common enemy when it comes to terrorists."

Musharraf's allies lost elections last month, and new prime minister Yousuf Raza Gilani told US President George W. Bush this week that a broader approach to the "war on terror" is necessary, including political solutions.

The strikes followed a "tacit understanding" with Musharraf and army chief General Ashfaq Kayani that permits US strikes on foreign rebels in Pakistan, but not against Pakistani Taliban, the Post quoted officials as saying.

It quoted one senior official as describing the strikes as a "shake the tree" strategy designed to force Al-Qaeda chief Osama bin Laden and key lieutenants to move in ways that US intelligence can detect.

In January, a missile strike attributed to the United States killed senior Al-Qaeda commander Abu Laith al-Libi.

There was no immediate response from Pakistani officials on the report.

Pakistan has never formally admitted to allowing such missile strikes and Musharraf earlier this year said that unauthorized military actions on Pakistani soil would be treated as an invasion.

The report came as two senior US diplomats, Deputy Secretary of State John Negroponte and Assistant Secretary of State for South Asian affairs Richard Boucher, continued a visit to Pakistan apparently aimed at wooing the new government.

A senior partner in the new coalition government, former premier Nawaz Sharif, warned the envoys earlier this week that parliament would review Musharraf's "one-man" strategy against Islamic extremism.

Sharif said he told them that it was unacceptable for Pakistan -- which has suffered a recent wave of suicide bombings blamed on militants -- to become a "murder-house" for the sake of US policies.

Opposition leader Benazir Bhutto, of whose party the new prime minister is a member, was assassinated in a suicide attack in December.

Boeing seeks to make India its global partner

Pramit Pal Chaudhuri Hindustan Times -- New-Pub, March 23, 2008 Sunday 4:16 PM EST

NEW DELHI, India, March 23 -- While Boeing is interested in selling airplanes to India, its overall goal is to make a global partner out of India. "This integrated enterprise strategy is what differentiates Boeing from its rivals," says Ian Thomas, head of Boeing India. The US aerospace giant is also investing millions to expand India's R&D capability, civil aviation infrastructure and hi-tech manufacturing base.

At one level, Boeing is certainly still interested in selling its products to clients in India. Boeing has sold $ 25 billion worth of civilian aircraft ranging from Air India airliners to three business jets designed to serve as "the Indian equivalent of Air Force One." The future holds even more promise: Boeing estimates India will buy 911 aircraft worth $ 86 billion over the next 20 years.

Then there is the potential for military sales. Besides the F-18 Super Hornet fighter, Boeing also has its P-3C Orion reconnaissance aircraft, Chinook CH-47 helicopter and Apache attack helicopter to offer. "If Boeing in India was only about lots of airplanes and big dollars," says Thomas, "It would make a short story."

At another level, Boeing is investing heavily in broadening India's capability.

In infrastructure, Boeing has invested in a $ 100 million maintenance center in Nagpur, the emerging intermodal transport hub for the country. The firm is helping Air India set up a $ 75 million engineer and pilot training facility in Mumbai. "The facility will train personnel beyond Air India's needs," says Thomas.

In hi-level manufacturing, Boeing is encouraging Indian firms to "step into the aerospace industry and join the Boeing supply chain." One $ 500 million deal has Tata Steel contracted to provide titanium floor beams for the Dreamliner.

A more long-term arrangement is the company's recent 10-year, $ 1 billion MoU with Hindustan Aeronautics Limited.

While some of this subcontracting is a consequence of the offset obligations Boeing has earned from its sales to Air India, what Boeing is doing goes "far beyond its offset obligations," says Thomas. For example, his firm is also having Indian firms make defence components even though "Boeing has accrued no defence offset requirements, as it has made no defence sales in India."

At a third level, Boeing is developing a R&D partnership with India's scientific establishment. It now has a remarkable array of technology partners in India ranging from the Indian Institute of Science and the Council of Scientific and Industrial Research to Wipro and HCL.

The Hindustan Times is provided through HT Syndication, New Delhi.

China's military officials urge combat readiness: report

by Staff Writers
Beijing (AFP) March 7, 2008
Chinese military officials have urged combat readiness in efforts to reunify Taiwan, just days after the government announced a 17.6 percent rise in defence spending, state press said Friday.

"Preparations for military struggle shall be continued, which is now the most important, practical and imperative task", Xinhua news agency quoted Jing Zhiyuan, a People's Liberation Army (PLA) artillery commander, as saying.

Jing "urged armed forces to provide solid military backup for the nation's realisation of peaceful reunification" with Taiwan, it said.

Jing commands China's Second Artillery Force, which, according to Taiwan defence officials, has deployed more than 1,000 ballistic missiles facing the island.

He was speaking while in Beijing as a delegate to the annual parliamentary session that began on Wednesday.

Chang Wanquan, head of the PLA General Armaments Department, also urged development of high-tech weapons and equipment to boost the army's combat readiness, the report said.

China announced on Tuesday its defence spending would jump 17.6 percent to 417.8 billion yuan (about 57.2 billion dollars) this year but insisted the rise was moderate.

China views Taiwan as a rebel province awaiting reunification, by force if necessary. The two sides split at the end of a civil war and the issue is regarded as one of Asia's most dangerous potential flashpoints.

Defence deals overtake 123

By Asok Malik

Constant and unrelenting pressure from corporate India is one of the key factors keeping alive hopes of the India-United States nuclear deal. Indeed, as a senior Ministry of External Affairs (MEA) official put it, "While the focus may be on civil nuclear cooperation and arms purchases, the sinews of the strategic relationship are really being built by corporate collaborations."
As evidence, both Government and business sources pointed to February's Defexpo 2008 - India's flagship defence exposition - and the flurry of MoUs signed between Indian and American companies. For instance:

· The Faridabad and Roorkee-based Precision Electronics has tied up with Raytheon to develop military communication technology.

· The Tata Group has announced plans to manufacture helicopter cabins for the Sikorsky Aircraft Corporation - maker of the well-known Black Hawk helicopters. The Tatas have also formed a joint venture with Boeing to manufacture defence-related aerospace components. In addition, they have joined hands with Israel Aerospace Industries to "manufacture and develop missiles, pilotless aircraft, electronic warfare systems ... and other defence equipment".

· The public sector Bharat Earth Movers Limited (BEML) has tied up with General Dynamics to make armoured patrol vehicles for use in difficult terrain.

While similar arrangements have also been announced between Indian and European companies, the "bulk of the agreements are with the Americans" "It is important to note," said an MEA source, "that these are not Government-to-Government technology sharing protocols. These are purely commercial deals between business corporations."

The slew of MoUs, sources said, is indicative of two things. First, it suggests a tacit approval from Washington, DC. Say 20 years ago, State Department and Pentagon bureaucrats would not have been as relaxed about sharing military-use know-how with Indian companies.

Second, as a senior official said, "In part, the American companies are anticipating offset commitments should they get Indian defence orders. Even otherwise, the commercial logic of outsourcing in IT and component manufacture is compelling, and so they are looking to India."

"Offset commitments" is the term for compensatory obligations a foreign company must incur in India when it wins a large Government order. Boeing, for example, makes the F-18 combat aircraft, which is in contention for a Rs 40,000 crore order from the Indian Air Force.

The implications of the Defexpo MoUs could be felt in the years to come. By plugging into the American military-industrial complex, Indian companies and Indian capital are likely to develop a stake in its success, sources argued, and create both a momentum and a stronger lobby for India-US strategic relations.

It could also push the political establishment into a strange dilemma if American military products, with Indian-made components, are accepted as superior and bought by third countries, but ignored in India itself. In a hypothetical situation, said one analyst, "Buying from the Russians on political rather than technological grounds will become more difficult if the competing equipment uses components and elements made by Indian companies and Indian labour."