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India Is Emerging As A New Major Market for U.S. Defense Industries

During the Cold War period, non-aligned India bought most of its armaments from the former Soviet Union. But in recent years, U.S. arms sales to India have increased rapidly.

When India needed military transport planes and helicopters last January, it placed the order with Maryland-based Lockheed Martin Corporation. With the completion of this two billion dollar deal, Washington hopes the door is fully open on a major new market for U.S defense industries. In this report we look at the emerging defense relationship between the United States and India.

Russia appears to be losing what was a near-monopoly on arms sales to India. Over the last several years, India has increasingly looked toward the United States and Israel to fulfill its needs for state-of-the-art military goods.

Commodore Uday Bhaskar, is a retired Indian Navy officer with 37 years of service. He was a member of India’s Task Force on Global Strategic Developments. He agrees that during the Cold War, India relied mainly on the former Soviet Union for purchases of advanced weaponry. But as U.S. – India relations have improved, so has India’s desire for American military equipment.

“More recently, I would say, there has been a change in the texture of the relationship from what was once described as an estranged relationship, India and the United States are moving to a degree of cautious engagement. It is in that sense India has been looking at the most credible and viable sources for military equipment, and clearly the United States has a very credible global profile as a supplier of major military equipment.”

Commodore Bhaskar says India has charted a wise course on delicate bilateral and multilateral issues. He adds that the stability of India’s political system has played a key role in America’s willingness to sell India “cutting-edge” weapons systems. “The vibrancy of Indian democracy and the way in which India has conducted itself, both as far as weapons of mass destructions are concerned, and the way in which India has honored all its global commitments without exception, these, to my mind, were taken on board by the United States, particularly the Bush Administration.”

Next month, India seeks to purchase 126 new fighter jets worth $12 billion dollars. Several U.S. companies such as Lockheed Martin, the world's biggest defense contractor, and aerospace giant Boeing, will compete for the contract, trying to edge-out their Russian and European rivals.

American defense contractors got a boost for their bid when U.S. Defense Secretary Robert Gates visited New Delhi last month. Mr. Gates reaffirmed America's commitment to a strong defense relationship with India.

"I indicated that we obviously are interested and believe that we are very competitive in the selection of the new fighter, the multi-role combat fighter here in India and that we ask no special treatment, says Mr. Gates. " We simply are pleased to have a place at the table and we believe in a fair competition that we have a very good case to make."

Peter Spiegel, defense correspondent for the Los Angeles Times newspaper, traveled with Defense Secretary Gates on his recent trip to India.

Mr. Spiegel says that over the last three years, the United States has mounted a concerted effort to increase military sales throughout South Asia. He adds that Asian nations have reacted favorably to U.S. overtures, in part because they are uneasy about the rise of China.

“I think there are two things going on here. One is purely commercial. The Indian defense budget is growing rapidly, and unlike China, they are buying weapons from overseas. India is one of the largest overseas acquirers of weapon systems, which is frankly good for the U.S. defense industry, if they are able to crack that market. So, there is a purely commercial interest here for the U.S. government," says Mr. Spiegel. "At the same time we should not underestimate the view of the U.S. about what China is up to there. They are trying to build a Bluewater Navy on their own, trying to acquire an aircraft carrier, are building submarines. I think the U.S. views the alliance with regional navies, particularly the Indian navy, as a real hedge against China.”

Commodore Bhaskar says an increased U.S. focus on Asia, and particularly the rise of China, have caused Washington to better appreciate India’s strategic importance. India’s strong democratic tradition, impressive economic performance, and civilian control of the military are all seen as attractive factors in pursuing a closer strategic relationship. “The United States, to my mind, has come to a strategic determination that, with the end of the Cold War and the advent of what you might describe as post 9/11 global security scenario that they need to engage with India in the furthering of abiding US interests in the 21st century at least in the early part.”

During his visit to New Delhi last month, U.S. Defense Secretary Robert Gates also talked with Indian officials about what has been dubbed the “1-2-3 Agreement.” The agreement would put into effect a U.S.- India civilian nuclear deal that would allow the export of U.S. nuclear fuel and technology to India.

Los Angeles Times correspondent Peter Spiegel says the U.S. government has tried to keep the civilian nuclear deal separate from the U.S.-India military relationship.

“Secretary Gates, when he was in Delhi, and I was traveling with him, repeatedly emphasized that this was not his main reason for being there, that the civilian nuclear deal was a deal worked out between the governments of U.S. and India, but separate from the defense relationship. It certainly could hurt the US-India relationship if the deal falls through, but I think the military- to- military relationship is so important to the U.S. now that it would not affect the defense relationship if the civilian nuclear deal falls through.”

Analysts say that, if the nuclear agreement can be implemented, it will be a milestone in U.S.-India relations. Meantime India's defense purchases are projected to double to more than $30 billion dollars by 2012, and climb to a stunning $80 billion by 2022.

This program was written by Subhash Vohra. For International Press Club, I’m Carol Castiel.

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