Foreign Defense Companies Flock to India Air Show

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13 February 2009

Defense firms from 25 countries are showcasing their hardware at an international air show being hosted by India. India plans to spend billions of dollars on military equipment in the coming years.

The five-day international air show being held in Bangalore has attracted nearly 600 armament and aerospace companies - half of them from overseas. The show concludes Sunday.  

The largest representation comes from countries such as France, Russia, Britain, United States, Israel and Germany, which are eyeing lucrative contracts for fighter jets, transport aircraft, helicopters and warships which India is expected to hand out.  

India's Defense Minister A.K. Antony says the country will not scale back on defense purchases despite its slowing economy, and will go ahead to buy whatever its military needs.

Rahul Bedi at Jane's Defense Weekly in New Delhi says India's plans to spend $30 billion over the next five years to modernize its military has made it one of the world's biggest markets for defense firms.

"In times of recession, most militaries are downsizing themselves, particularly in Europe, and a lot of the slack, these companies hope will be taken up by India," he said.

India is also positioning itself as a center for research, design and some production work for foreign defense firms as it seeks to build its own technology skills in defense manufacturing.  

Rahul Bedi says India is asking firms which sell defense equipment to invest part of the money they earn in developing some military technology in India.  

"Transfer of technology is a big part of this whole exercise," he said. "India hopes that through this route it will upgrade its military technology and be able to become self reliant over the next 15 or 20 years."

The biggest item on India's shopping list is a contract for 126 fighter jets estimated to cost nearly $10 billion. Major companies competing for the deal, such as Boeing and Lockheed Martin from the United States, and Europe's Airbus Industrie, are participating in the air show.

India is not just a buyer. The country's state-owned defense companies are also hoping to sell equipment they manufacture to smaller countries. For example, India's Hindustan Aeronautics Ltd. says it has won a contract to sell advanced light helicopters to Ecuador.

China is taking part in the show for the first time, reflecting the improved relations between the two Asian giants.