India Lining Up $10 Billion Worth Defence Deals With US

Jun 24, 2019

NEW DELHI: India is lining up defence deals worth around $10 billion for the US over the next two-three years despite ongoing trade disputes and immigration concerns, even as New Delhi and Moscow have worked out a payment mechanism to get around Washington’s sanctions regime against acquisition of Russian weapon systems.

The latest deal being finalised by India under the foreign military sales programme of the US is for the acquisition of 10 more Poseidon-8I long-range maritime patrol aircraft for over $3 billion, defence ministry sources said. “The procurement case for the 10 P-8I aircraft was cleared by an MoD committee last week. It will now be sent for approval to the Defence Acquisitions Council headed by defence minister Rajnath Singh by August. These 10 P-8Is will be more advanced than the 12 such aircraft already procured by India,” a source said.

The Navy inducted the first eight Boeing-manufactured P-8Is, which are packed with sensors and armed with Harpoon Block-II missiles, MK-54 lightweight torpedoes, rockets and depth charges to detect and destroy enemy submarines, under a $2.1 billion deal inked in January 2009. The next four P-8Is are slated for delivery by 2021-2022 under another $1.1 billion contract signed in July 2016.

The Navy wanted over a dozen more P-8Is but agreed to 10 aircraft because of the concurrent tri-Service proposal to acquire 30 armed Sea Guardian (Predator-B) drones for over $2.5 billion from the US. The case for the ‘hunter-killer’ drones, with 10 each slated for Navy, IAF and Army, is now headed for the DAC.

The other deals in the pipeline include 24 naval multi-role MH-60 ‘Romeo’ helicopters ($2.6 billion), the National Advanced Surface to Air Missile System-II for the missile shield over Delhi (almost $1 billion) and six more Apache attack helicopters ($930 million). With the US having already bagged Indian arms contracts worth $17 billion since 2007, and the two countries expanding their strategic partnership on several fronts, India is riled at the continuing threat of financial sanctions under the CAATSA.

The Trump administration has expressed its opposition to India’s inking of the $5.43 billion contract for S-400 Triumf missile systems with Russia in October 2018, which was followed by another $3 billion deal for lease of a Akula-1 nuclearpowered attack submarine in March 2019. India’s case for waivers from CAATSA is likely to figure when US secretary of state Mike Pompeo comes visiting on Tuesday.

India has resumed some payments to Russia for defence contracts inked earlier through a new mechanism that uses a mix of foreign currency and a Rupee-Rouble transfer system. Indian banks with “exposure to the US” had earlier suspended payments and instalments to Russia to avoid the threat of punitive sanctions under CAATSA. “The US has to realise that India has a separate longstanding strategic partnership with Russia… it cannot be wished away. There is no plan to cancel the S-400 deal,” said a source.

Courtesy:TOI