Western powers seek India defense deals

NEW DELHI: Western governments are rushing to visit India’s new Prime Minister Narendra Modi, drawn by the prospect of multibillion-dollar deals as the government prepares to open the nascent defense industry to foreign investment.
Senior politicians from France, the United States and Britain arrive in quick succession over the next 10 days as Modi prepares to accelerate the modernization of the country’s mostly Soviet-era weaponry.
Modi intends to build up India’s military capabilities and gradually turn the world’s largest arms importer into a heavyweight manufacturer — a goal that has eluded every prime minister since independence in 1947.
On the table is a proposal circulated within the new government to raise caps on foreign investment — with one option to allow complete foreign ownership of some defense projects.
“All the countries are trying to make their case, especially as there is the sense that the Indian market will undergo a shift,” said Harsh Pant, professor of international relations at King’s College London.
“They get a sense from their dealings that something dramatic is going to happen and they want first-mover advantage,” said Pant, who specializes in Indian defense.
First to arrive in New Delhi will be French Foreign Minister Laurent Fabius, whose top priority is to close a stalled deal to sell India 126 Rafale fighter jets, built by Dassault Aviation, for an estimated $15 billion.
Fabius, who arrives on Monday, will meet Modi as well as his most powerful minister, Arun Jaitley, who holds the twin portfolios of defense and finance — and can therefore decide both whether to sign the deal and when to release the money.
US Senator John McCain is also due in India next week. McCain, whose Arizona constituency includes weapons makers such as Boeing and Raytheon, told the Senate on Thursday that Washington should seek to bolster India’s economic and military rise.
“This is an area where US defense capabilities, technologies, and cooperation — especially between our defense industries — can benefit India enormously,” McCain said of India’s drive to modernize the armed forces.
In the second week of July, Britain is likely to send in Foreign Secretary William Hague and finance minister George Osborne, a British government source said on Friday.