Why India-US defence deals have become big business

C130 J Super Hercules Experts believe Indian-US defence co-operation is just beginning to take off

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Hitting the tarmac at the Hindon airbase near the Indian capital, the C130 J Super Hercules is the Indian Air Force's latest acquisition.

It is one of six military transport aircraft ordered from the US in a deal worth almost $1bn.

Aimed at enhancing the special operations capacity of the Indian armed forces, it is the first major US defence sale to India in over 10 years.

For the American manufacturer Lockheed Martin, the arrival of its fleet is a step forward.

"The Indian government is slowly expanding its scope to different avenues to acquire different products," says its Chief Executive, Roger Rose.

"With the C130 J, we will be here for 30 years and we expect to expand in other areas as well."

This week, Lockheed Martin is taking part in the Aero India show in Bangalore, where some of the top aircraft manufacturers from around the world will display their latest wares.

Economic opportunity

India is looking to spend more than $50bn over the next five years to modernise its armed forces, including a $10bn deal to buy 126 new fighter jets.

Lockheed is hoping it will win the country's biggest defence contract and sell its F-16IN Super Viper combat aircraft.

Start Quote

Puneet Kaura

While the US is entering the Indian market, we are also getting access to some state-of-the-art technologies which will be to the benefit of our customers”

End Quote Puneet Kaura Samtel Display Systems executive director

With the US economy still recovering, it is countries like India that present an opportunity to American firms.

On a mission to turn warming political ties into business, US Commerce Secretary Gary Locke is visiting India this week.

With him are leaders of 24 US companies, including major players in defence and nuclear power.

It comes shortly after Washington ended most restrictions on sensitive technology exports to Delhi.

Secretary Locke is hoping to seize on the opening and boost American exports to India. And by promoting hi-technology goods, Mr Locke wants to create more job opportunities back home.

His trip is the first by a US cabinet member to India since President Obama's visit in November.

"When President Obama came to India and said I want to seek India's help in creating jobs, what he did not say is that one Boeing or another company's aircraft we buy produces 10,000 jobs in the US," says Dr Amit Mitra, the secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI).

He adds that India is a big job creator in the US, a reason why Mr Locke is making stops in Delhi, Mumbai (Bombay) and Bangalore to cut more deals.

As more American businesses hope to enter the hi-tech sector in India, it is local companies like Samtel Display Systems that want to benefit as well.

'New collaborations'

At its manufacturing lab in the outskirts of Delhi, technicians are mounting and testing electrical units.

Samtel Display Systems factory India is eager to acquire more technological know-how

Samtel develops cockpit display systems for military and commercial use.

The company's Executive Director, Puneet Kaura, says better trade relations between the US and India means it can get its hands on technology that has been so far inaccessible due to export restrictions.

"While the US is entering the Indian market, we are also getting access to some state-of-the-art technologies which will be to the benefit of our customers," said Mr Kaura.

"This wasn't happening before and with this new change I think the scenario will look very different in coming years. It would be in the form of new business opportunities, new collaborations on the technology front and redefining the future as we move forward."

India is fast transforming itself from a regional power to a global giant. Its rapid growth has managed to grasp the attention of many Western economies including America.

By forging closer defence and trade ties, it is now becoming a key market for the Obama administration's National Export Initiative (NEI), which aims to double US exports in five years.

But while it is helping the American economy to recover, India hopes that better trade relations will also be beneficial for its own local companies, many of which share Mr Kaura's eagerness to acquire up-to-date equipment from overseas.

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