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Boeing Says Congress Re-Election May Boost India Defense Market
By Liza Lin
May 29 (Bloomberg) -- Boeing Co., the second-biggest U.S. defense contractor, said Indias military revamp and warmer ties with the U.S. after recent elections may boost Indias spending on defense equipment including helicopters and fighter jets.
Orders from India and other Asian nations will help boost the defense units international sales to 20 percent in five years from 16 percent now as governments spend more to protect trade routes and borders, Jim Albaugh, Boeings defense chief, said in an interview in Singapore today.
India is doing a major recapitalization of a lot of defense equipment, Albaugh said. Were talking about attack helicopters, heavy helicopters, ocean surveillance and attack airplanes. Eventually they are going have some interest in airborne early warning and control.
Chicago-based Boeing is turning to international exports to boost sales as U.S. defense spending slows after rising more than 70 percent in the last eight years. India may buy 126 fighter-jets valued at as much as $11 billion to replace aging Russian fighters and quickly modernize its armed forces.
The planemaker has teamed up with local companies such as Tata Group and Hindustan Aeronautics Ltd. to participate in the fighter jet deal. The bidders will soon start flight tests of the aircraft in India and in their country of production, Albaugh said. He expects the decision to come at the end of next year or early 2011.
Boeing is pitting its F/A-18 E/F Super Hornet against fighters including Lockheed Martin Corp.s F-16, Dassault Aviation SAs Rafale and Russias MiG-35.
Warming Ties
Lockheed and Boeing, the largest U.S. defense contractors, made their first military sales to India only within the past year and a half. Until the U.S. lifted sanctions in September 2001 that were imposed after 1998 nuclear tests, India had relied on the former Soviet Union and later Russia and European suppliers for weapons for more than five decades.
In further signs of warming diplomatic relations between the U.S. and India, President Barack Obama invited recently re- elected Indian Prime Minister Manmohan Singh to visit Washington to discuss fighting global terrorism and the economic slowdown, the U.S. embassy in India said on May 24.
Singh took the oath of office as Indias prime minister for a second five-year term on May 22 after his Congress party-led alliance scored the nations biggest election win in two decades.
Boeing forecasts Indias growing defense market may be valued at $31 billion in the next 10 years.
Helicopter Contract
The company has also received expressions of interest by India for 22 attack helicopters and 15 heavy-lift ones, Albaugh said. Boeing plans to offer its twin-rotor Chinook and Apache choppers, he added, declining to disclose the potential value.
Boeing signed a contract with India to supply eight P-8I maritime aircraft in January, which may give it an advantage over competitors for the fighter-jet contract, Albaugh said.
It gives us a knowledge on how to work with the Indian customer, he said. To the extent we can deliver on the promises that we made to the Indian Navy, it will help us on a reputation standpoint and a past performance standpoint.
To contact the reporter on this story: Liza Lin in Singapore at Llin15@bloomberg.net.
By Liza Lin
May 29 (Bloomberg) -- Boeing Co., the second-biggest U.S. defense contractor, said Indias military revamp and warmer ties with the U.S. after recent elections may boost Indias spending on defense equipment including helicopters and fighter jets.
Orders from India and other Asian nations will help boost the defense units international sales to 20 percent in five years from 16 percent now as governments spend more to protect trade routes and borders, Jim Albaugh, Boeings defense chief, said in an interview in Singapore today.
India is doing a major recapitalization of a lot of defense equipment, Albaugh said. Were talking about attack helicopters, heavy helicopters, ocean surveillance and attack airplanes. Eventually they are going have some interest in airborne early warning and control.
Chicago-based Boeing is turning to international exports to boost sales as U.S. defense spending slows after rising more than 70 percent in the last eight years. India may buy 126 fighter-jets valued at as much as $11 billion to replace aging Russian fighters and quickly modernize its armed forces.
The planemaker has teamed up with local companies such as Tata Group and Hindustan Aeronautics Ltd. to participate in the fighter jet deal. The bidders will soon start flight tests of the aircraft in India and in their country of production, Albaugh said. He expects the decision to come at the end of next year or early 2011.
Boeing is pitting its F/A-18 E/F Super Hornet against fighters including Lockheed Martin Corp.s F-16, Dassault Aviation SAs Rafale and Russias MiG-35.
Warming Ties
Lockheed and Boeing, the largest U.S. defense contractors, made their first military sales to India only within the past year and a half. Until the U.S. lifted sanctions in September 2001 that were imposed after 1998 nuclear tests, India had relied on the former Soviet Union and later Russia and European suppliers for weapons for more than five decades.
In further signs of warming diplomatic relations between the U.S. and India, President Barack Obama invited recently re- elected Indian Prime Minister Manmohan Singh to visit Washington to discuss fighting global terrorism and the economic slowdown, the U.S. embassy in India said on May 24.
Singh took the oath of office as Indias prime minister for a second five-year term on May 22 after his Congress party-led alliance scored the nations biggest election win in two decades.
Boeing forecasts Indias growing defense market may be valued at $31 billion in the next 10 years.
Helicopter Contract
The company has also received expressions of interest by India for 22 attack helicopters and 15 heavy-lift ones, Albaugh said. Boeing plans to offer its twin-rotor Chinook and Apache choppers, he added, declining to disclose the potential value.
Boeing signed a contract with India to supply eight P-8I maritime aircraft in January, which may give it an advantage over competitors for the fighter-jet contract, Albaugh said.
It gives us a knowledge on how to work with the Indian customer, he said. To the extent we can deliver on the promises that we made to the Indian Navy, it will help us on a reputation standpoint and a past performance standpoint.
To contact the reporter on this story: Liza Lin in Singapore at Llin15@bloomberg.net.
