Indian Decade

India’s Defence Market

Will India pick Sweden over US companies with its Multi-Role Combat Aircraft purchase?

With India set to beef up its defence capabilities and looking to import $50 billion worth of armaments and equipment over the next 5 years, it’s no wonder all of the major arms-exporting nations are wooing it. US President Barack Obama is expected to nudge India toward an $11 billion contract for 126 Multi-Role Combat Aircraft (MRCA) to US companies when he begins his India visit on November 5. However, there's no guarantee that India will oblige, and on the contrary may well bluntly tell Obama that US companies figure poorly in terms of price and technology transfer and that in fact Sweden is way ahead in the MRCA deal stakes. Besides, India is none too happy with Obama’s overly protective attitude on the issue of outsourcing.

In contrast, India and Russia have inched closer to sealing a multi-billion dollar fighter and transport aircraft deal. The two countries have already concluded a shareholders agreement for formation of a Joint Venture Company for the development and production of the Multirole Transport Aircraft (MTA). They've also agreed to expedite modalities for the proposed project for the joint design, development and production of the Fifth Generation Fighter Aircraft (FGFA). The issue came up for extensive discussion at the tenth meeting of the India-Russia Inter-Governmental Commission on Military Technical Cooperation in New Delhi on October 7, where Indian Defense Minister AK Antony held talks with his visiting Russian counterpart AE Serdyukov.

’India hopes to get 45 MTA and also finalize the FGFA…now it's in the final stages of the Indian government, some technical formalities between the governments is needed and I am sure we will be able to complete very soon…within a few months,’ Antony remarked at a joint press conference with Serdyukov after their talks. Antony also stated that as per this agreement, India will receive approximately somewhere between 250-300 of the most modern FGFA.

India needs to diversify its arms procurement basket. More importantly, the country must insist on complete technology transfer and a clause that the same weapons and technology will not be sold to China and Pakistan. With the US usually baulking at the very idea of technology transfer, this is where other countries, especially Israel, Russia and Sweden, can score.