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By AGENCE FRANCE-PRESSE
Published: 5 Jan 13:53 EST (18:53 GMT)
Defense News

NEW DELHI - India has signed a $2.1 billion deal with U.S. aerospace giant Boeing to buy maritime surveillance aircraft for the Indian navy, officials told AFP on Jan 5.

The agreement to buy eight P-8I long-range reconnaissance aircraft marks India’s biggest military aircraft deal with the United States, defence ministry officials said. The contract was signed on January 1 in New Delhi.

“The deal is finally through and we will receive the first P-8I in 2013 while the remaining seven will be procured in a phased manner over the next three or four years,” a senior official said on condition he not be named.

The contract includes lifetime maintenance support and an option for the acquisition of up to eight additional P-8I aircraft, the official said.

The deal comes less than a year after India and U.S.-based Lockheed Martin signed an agreement worth $962 million for the purchase of six C-130 Hercules transport planes for the Indian army.

Both Lockheed and Boeing are also in the race for a $12 billion contract to sell 126 fighter jets to the Indian air force. Four other global companies from France, Russia, and the European Union are in the race for t he world’s richest fighter jet deal in 16 years.

India last year also signed a 1.5-billion euro ($2.2 billion) deal with France’s Dassault to upgrade 51 Mirage 2000 fighter jets, which the Indian air force bought in 1985.

India, the largest buyer of armaments among emerging nations, plans to spend 30 billion dollars until 2012 to modernize its 1.23-million-strong military, the world’s fourth largest.

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Related Article-1:
India Orders 8 Boeing Military Planes In $2.1 Billion Deal

CNN Money

NEW DELHI -(Dow Jones)- The Indian government Monday said it has signed a $2.1 billion deal with Boeing Co. (BA) for the supply of eight P-8I maritime patrol aircraft in its latest move to modernize its mainly Soviet-vintage armed forces.

The agreement for the P-8I, which is the proposed Indian variant of the U.S. Navy’s long-range maritime P-8A aircraft, will boost the South Asian nation’s ability to monitor its 7,600 kilometer coastline. The plane can also conduct both surface and antisubmarine warfare.

“Though we have signed a deal, final clearance is still required from a U.S. authority,” Indian Navy spokesman Commander Nirad Sinha told Dow Jones Newswires.

“The first plane delivery is four years from the final contract signing, so I think it should come in 2013.”

Boeing India unit spokeswoman Swati Rangachari said the company is expected to issue a statement on the P-8I deal sometime Tuesday.

India’s move to modernize its defense forces over the next decade has spurred competition amongst global aerospace and military contractors as they eye equipment and systems contracts worth billions of dollars, including a $12 billion deal for 126 fighter jets.

India is already among the world’s top arms importers and is likely to issue contracts worth up to $60 billion by 2015 for items ranging from artillery to fighter jets and mid-air refueling tankers to submarines and warships.

India has a policy which makes it compulsory for foreign companies that clinch military orders to reinvest a proportion of the winning contractual value in India.

This reinvestment, also known as offsets, is part of India’s plan to build its defense and aerospace industries - both public and private - including via transfer of technology.

Boeing, which had planned to sell its Apache AH-64D Longbow attack helicopter to the Indian Air Force said in October that it won’t bid for a contract to supply 22 helicopters due to time constraints.

Separately, Boeing’s commercial aircraft division sells passenger aircraft to Indian carriers. the company has received 164 orders from local airlines valued at more than $25 billion since India’s budget airline travel boom began in 2004.

In July, Boeing said it estimated that India will need 1,001 new aircraft worth $105 billion by 2027 as robust economic growth boosts local and international air travel.

-By Nitin Luthra, Dow Jones Newswires; +91-11-4356-3306; nitin.luthra@ dowjones.com

(END) Dow Jones Newswires
01-05-09 0155ET
Copyright (c) 2009 Dow Jones & Company, Inc.

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Related Article-2:
Boeing P-8I Selected as Indian Navy’s Long-Range Maritime Patrol Aircraft

Boeing

ST. LOUIS, Jan. 06, 2009 — The Government of India has selected The Boeing Company [NYSE: BA] to provide eight P-8I long-range maritime reconnaissance and anti-submarine warfare aircraft to the Indian navy. The P-8I is a variant of the P-8A Poseidon that Boeing is developing for the U.S. Navy.

India is the first international customer for the P-8. Boeing will deliver the first P-8I within 48 months of the contract signing, and the remaining seven by 2015.

“The men and women of The Boeing Company are pleased that India has selected the P-8I,” said Jim Albaugh, president and CEO of Boeing Integrated Defense Systems (IDS). “This aircraft will provide outstanding capabilities tailored to India’s unique maritime-patrol requirements.”

The P-8I is a true multi-mission maritime patrol aircraft (MPA) that features greater flexibility and a broader range of capabilities than MPAs currently in service. The P-8I can operate effectively over land or water while performing anti-submarine warfare missions; search and rescue; maritime interdiction; and long-range intelligence, surveillance, target acquisition and reconnaissance.

The P-8I provides India with speed, reliability, persistence and room for growth to satisfy the country’s requirements now and well into the future. The aircraft features an open system architecture, advanced sensor and display technologies, and a worldwide base of suppliers, parts and support equipment.

“Throughout the negotiations, both sides worked diligently to give India the most advanced anti-submarine and anti-surface warfare aircraft in the world today,” said Vivek Lall, Boeing IDS vice president and India country head. “The result of these efforts will bring the Indian navy advanced technology that is unmatched in maritime reconnaissance aircraft, and the reach and capability it needs to defend India’s vast coastline and maritime waters.”

A unit of The Boeing Company, Boeing Integrated Defense Systems is one of the world’s largest space and defense businesses specializing in innovative and capabilities-driven customer solutions, and the world’s largest and most versatile manufacturer of military aircraft. Headquartered in St. Louis, Boeing Integrated Defense Systems is a $32.1 billion business with 71,000 employees worldwide.