India has now decided to shortlist Dassault's Rafale and the Eurofighter's GmbH for its $12-billion dollar Medium Multiple Role Combat Aircraft, ostensibly on purely technical grounds. The losers in this initial round were the Swedish Gripen and two US-built aircraft, Boeing's F/A-18 Super Hornet and Lockheed's F-16 Super Viper. The Indian decision has been met with considerable dismay and disappointment in US defense circles. The disappointment is particularly great because US President Barack Obama while on a state visit to India last November had made a concerted pitch to Indian officials to persuade them to look to the United States.
There’s little question, that at least in the short run, this decision will have some adverse consequences for the growing Indo-US relationship. This decision comes hard on the heels of a highly restrictive law dealing with foreign investment in India's nuclear industry. The passage of the nuclear legislation last year had already had more than a chilling impact on potential American investors in India's civilian nuclear power industry. In the wake of this move, two major US aerospace firms that had hoped to acquire a substantial presence in the Indian market have now been effectively removed from the fray.
It’s too early to gauge the full impact of these two decisions on the course of Indo-US relations. Some Indian commentators have sought to minimize the potentially adverse fallout, arguing that the overall trajectory of the relationship is now on such a sound course that decisions of this order are unlikely to lead it into troubled waters. Such an assessment, though superficially reassuring, may prove to be overly rosey. Time will surely tell.