U.S. disappointed over IAF deal, but respects process

[gubbi]

this childishness in calling the US Amerika and claiming some great pressure was applied is uncalled for and dumb.

I agree with you. But, just FYI, in Hindi, US/America is called Amreeka. You already know that. China is called Cheen. Those are just legit Hindi words.

 

[mikkix]

As i talked about the pakistani perspective, that is gr8 for us...

 

[SpArK]

U.S. Industry Loses Big in India: Is ITAR to Blame?​

Defense contractors and industry experts are trying to come to grips with India’s decision to exclude The Boeing Co. and Lockheed Martin Corp. from its $11 billion competition for a new fighter jet.

No specific rationale has yet been given by the Indian government for its determination to jettison Boeing's F/A-18, Lockheed F-16 and Saab’s Gripen fighters, and proceed with a head-to-head contest only between two European offers — the Eurofighter and the Dassault Rafale.

“Companies are very concerned about the logic for the decision,” said a U.S. industry source. “There’s a bit of puzzlement.”

India's decision was very surprising, says Tom Captain, vice chairman of global and U.S. aerospace and defense leader at Deloitte LLP. If the selection was based on technical merits, "It is difficult to explain how those two very capable aircraft were eliminated."



In the absence of factual information about how the selection was made, speculation is growing that restrictive U.S. export policies may have played a significant role in India’s evaluation of fighter jet candidates. Analysts had predicted that at least one of the two U.S. contenders would have the inside track. U.S. technology is considered more advanced, and more coveted by rising powers such as India. President Obama also raised the stakes by personally making a pitch on behalf of U.S. industry to Prime Minister Manmohan Singh during his visit to India. He also sent Singh a letter reinforcing the importance of India’s fighter program to the Obama administration. India is expected to buy up to 200 new aircraft.

“We feel that our products are the best possible available,” said the industry source.”

India is projected to spend $80 billion on new weapons and space systems over the next five years. It’s only a small fraction of what the United States spends, but the industry still regards it as a promising region where, once you get a foot in the door, opportunities could blossom.

Defense industry analyst Byron Callan contends that “technology transfer was a major consideration in this competition.”

Callan presumes that the U.S. government was “unwilling to see key AESA [active electronically scanned array] radar and other avionics and electronic warfare technology made available at the level India wanted,” Callan writes in a memo to industry investors. “Technology transfer has also been a key consideration in Brazil’s FX fighter competition which has been delayed.”

One issue to watch as a result of this decision, says Callan, is “whether the U.S. further relaxes defense technology export restrictions in order to keep domestic production lines open.” This is a major concern for U.S. manufacturers as Pentagon spending begins to contract next year. In the past, Callan says, “when the U.S. restrained or reduced its defense spending, policy shifted to exporting advanced weapons to strategic partners.”

He notes that F/A-18 production “may still run through the end of this decade based on U.S. orders and from countries that had hoped for F-35s and who operate earlier-generation F/A-18s.” The longevity of the F-16, meanwhile, “hinges on its ability to win in niche markets in the Middle East, but it is less relevant to Lockheed Martin and Northrop Grumman (which makes the radar) with F-35 and the new bomber program ramping up.”



For Boeing, losing India’s sales is a big blow because it needs foreign sales to keep the F/A-18 line open beyond the coming decade, unlike Lockheed, which has a long-term lifeline in the multinational Joint Strike Fighter.

“It will be interesting to see what India does with combat fighter technology acquired from either Dassault or EADS and BAE Systems, and engine companies as well,” Callan writes.

Larry Christensen, an export controls attorney at Miller & Chevalier, in Washington, D.C., believes the Indian decision will have lasting implications for U.S. industry, even though he says he has not seen any proof that India’s choice was influenced by ITAR, the International Traffic in Arms Regulations that restrict exports of sensitive U.S. technology.

The fact that an emerging power such as India would snub U.S. advanced weaponry offers further evidence that the current export control system — which dates back to the Cold War — has outlived its effectiveness, Christensen says. “The U.S. government cannot repeal the laws of economics,” he says. As the United States denies access to some of its best technology, it leaves a market void that, sooner or later, another country will fill. “When that happens, the U.S. export control policy of denial, or policy of heavy restrictions, become ineffective” for the purposes of barring potential enemies access to advanced weaponry, he says.

It is conceivable that India concluded that U.S. restrictions on technology sharing are not worth the hassle, Christensen suggests. Although the United States wanted India to buy its fighter jets, it was “putting strings on those sales” that would have curtailed India’s ability to upgrade components, software or sensors, or collaborate with other countries, he says. If India had picked a U.S. aircraft, ITAR would have "restricted them in their ability to move forward with that platform.”

On a smaller scale, the same problem affects U.S. suppliers of less flashy products such as surveillance, law-enforcement and border protection technology, says Christensen. “I know small firms that feel the pain of commercial customers saying that they like the U.S. product but they can’t live with the restrictions and the overhead that goes with ITAR controls.”

The consequences for U.S. competitiveness are significant, he says. “The market is changing. Other countries are developing good technology.” The time has passed when only the U.S., U.K., France or Germany were viable supplies of advanced hardware, he adds. “Technology is now available from Russia, China and Israel, countries that are tend to place fewer restrictions” on transfers.

Christensen points out that the Obama administration is taking meaningful steps to reforming ITAR to boost U.S. industry. “I believe that there is significant movement,” he says. Hundreds of government officials currently are busy redrafting regulations,” he says. “It’s a long arduous task, and I’m glad they’re taking the time to do it right.”

Despite the Indian loss, U.S. arms are still hot sellers. The Pentagon is projecting arms sales to foreign buyers to exceed $46 billion in fiscal year 2011. Demand for U.S. weaponry is “higher than ever,” according to Richard A. Genaille Jr., deputy director of the Defense Security Cooperation Agency. DSCA currently oversees a $330 billion portfolio of foreign military sales to 220 countries and international organizations.

At an industry conference in April, Genaille discussed efforts by the administration to increase foreign military sales as a means to court allies and boost Third World countries’ internal security. The goal is to revamp how the U.S. government manages international arms sales so it can be more “anticipatory” of future needs and more responsive to foreign allies’ requests.

The Obama administration, which regards weapon exports as a vehicle for bolstering the U.S. economy, believes that current methods for managing arms sales are too reactive, rather than proactive, he said. “It’s hard to be responsive when our system is geared to wait for a ‘letter of request’ from a country and then take action.”


U.S. Industry Loses Big in India: Is ITAR to Blame? - Blog

 

[canadakz]

China's nuclear warhead miniaturization technology is at the W88 level since the mid 90s according to US CIA reports while France's W88 compatible Tête Nucléaire Océanique has not started production yet. So no, China does not need france for n-bomb development. But China lags behind france significantly in nuclear reactors, however, modern day commercial reactors have diverged from military reactors by quite a bit, therefore, commercial reactors will be nearly no help to military reactor development.

 

[shree835]

It is name of your Father.
You may always google it.

Chacha Chamgadar Man...That is called Tejas not TEJA.

 

[tushar]

Hey SpArK,
Thanx for the post....not selecting US firm was needed, we might have made US realize that at-least if they wanna deal with India, they will have to relax their restrictions...

 

[rajusri]

US eyes India arms deals beyond fighter setback

US eyes India arms deals beyond fighter setback - The Economic Times

 

[Lala_Peace]

I don't think India has ever succumbed to external pressure without weighing the pros and cons of any decision.

It has been the character of our foreign policy.

Some may say Antony stood between the deal and US. But the fact is that the US companies did not able to convince India that their product is good enough.

In one hand we reject F-16 and 18 and in other hand we are buying transport aircraft worth 8 billion dollars.

I am happy India is consistent in its foreign policy based on national interest.

Aligning with USA or Russia or Europe or China is good as long as we are not jeopardizing India's national interest.

 

[Abu Zolfiqar]

I'm actually quite relieved that they didnt opt for the hornet

from a purely hindstany perspective, if i were them I'd opt for the Rafale. It's a formidable aircraft.


I must say however, thank God our procurement procedures are not so long and convoluted...

 

[praveen]

The US pushiness was also responsible for this

 

[shree835]

I'm actually quite relieved that they didnt opt for the hornet

from a purely hindstany perspective, if i were them I'd opt for the Rafale. It's a formidable aircraft.


I must say however, thank God our procurement procedures are not so long and convoluted...

Is this your frustration or something else?

We did not selected American Jets coz we don want to be American puppet like Pakistan…we Indians are seriously thinking on development of Civil and Military aviation Industry… and this decision is going to help us a lot…I hope both should be declared as winner.

 

[tushar]

I don't get it....i mean if your plane is not the best why would any country buy it ?? F18 and F16 didn't stand a chance against Rafale and EF... US is winning the contracts only by pressuring the countries....if they really wanted to win they should have fielded F35 in the first place, but at that time they were stubborn and then we signed the FGFA deal with Russia...

US fighters have the advantage that they are good at the cost they are available....but India hass made this clear that cost is not the issue....

Can anyone tell me what will be the cost of the deal if we select Rafale or EF respectively...?? I would appreciate if the answer doesnot come like 126 x cost of 1 rafale because we are purchasing 126 fighter jets and price would have been lesser for such a big dealrather than per aircraft price.....

Thanx...

 

[Whiplash]

I'm actually quite relieved that they didnt opt for the hornet

from a purely hindstany perspective, if i were them I'd opt for the Rafale. It's a formidable aircraft.


I must say however, thank God our procurement procedures are not so long and convoluted...

I know. If there is one thing I envy about pakistan, it is that you probably wouldn't have take 4 friggin years to evaluate MMRCA contenders!

 

[SpArK]

.


Selling fighter aircraft is a bit like selling cars, no point buying American Chevrolet if the Germans are selling Audi or French are selling Bugatti.

America tells you where to drive, how to drive and can turn off your car when they don't like your driving. You don't really own an American car, you merely rent it out at their pleasure. 1.2 billion people can't depend on America's mood to protect their interests

 

[notorious ausiee]

I must say however, thank God our procurement procedures are not so long and convoluted...

we are buying nearly 200 fighter jets worth 10 billions us dollars..the day when pakistan have this much money to spend then we will see your procedures.its faster to buy when u dont have much options and pakistan know very well they are going to buy f-16 or j-10 thats it. i dont think so you guys even need to have procurement procedures. pakistan just have one procurement policy and that is where you get soft loans buy those planes we are happy atleast MoD doing right things so far. peace!