Seen by Washington as a critical ally in containing the growth of China, a new State Department-approved deal to sell six more P-8I submarine hunting aircraft to India comes with the provision that 30% of the parts be made in India.
The “Make in India” program, promoted by Prime Minister Narendra Modi, has pulled in production on F-16s, P-8s, helicopters and missiles in recent years, as US companies compete hard to win billions in new contracts, Breaking Defense reported.
If the deal goes through — and most P-8I sales have been inked after such approvals — the order is worth up to US$2.42 billion to Boeing, but final price could be lower depending on how many jets and weapon systems are ordered.
The large offsets aren’t unique to Boeing.
Lockheed Martin is also working to sell India on its F-21 fighter, a derivative of the F-16, which would be built in India in a partnership with Tata. And European companies often offer impressive packages of their own.
The local companies include Hindustan Aeronautics Limited, TATA Advanced Materials, BDynamatic Technologies, Bharat Electronics, Electronics Corporation of India, Rossell Techsys, Avantel, Fokker Elmo Sasmos, and Kineco, the report said.
“We are committed to delivering offset programs that are in line with India’s Defence Acquisition Procedure and meet the Indian government’s stated goals, including strengthening India’s aerospace capabilities,” a statement from Boeing said.
India already operates 12 of the aircraft it has dubbed the “Neptune,” after it purchased eight from Boeing in 2009 via Direct Commercial Sale, and another four more in 2016.
The P-8I deal comes with the provision that 30% of the parts be made in India, a function of the Indian government’s push to bolster its industrial capacity at home, the report said.
The Indian firms involved in the manufacturing of components, include those building “structures, composites, electronics and wiring harnesses,” a Boeing spokesperson said.
“This proposed sale of an additional six P-8I aircraft will allow the Indian Navy to expand its maritime surveillance aircraft capability for the next 30 years,” the Pentagon’s Defense Security Cooperation Agency noted in its announcement of the proposed deal.
The deal follows a rushed delivery of maritime patrol helicopters to India last year also aimed at keeping track of submarines operating in the Indian Ocean, a growing threat evidenced last year with the discovery of a dozen Chinese Haiyi, or Sea Wing, underwater drones operating in the eastern Indian Ocean, the report said.
With New Delhi in a hurry to begin getting the state-of-the-art helicopters into use, and the US government eager to pull India closer as a hedge against growing Chinese naval capabilities, the US Navy allowed Sikorsky to take three of its brand new MH-60R Sea Hawks and begin modifying them to Indian standards to deliver this spring.
The helicopters are part of a US$900 million deal with Sikorsky for 24 MH-60R helicopters that will be delivered to India in 2023 and 2024, the report said.
The Obama administration designated India a Major Defense Partner in 2016, which grants New Delhi access to sensitive US defense technologies at a level comparable to NATO allies.
It’s the latest win for the Seattle-based P-8 program and its Puget Sound region suppliers, including a potential second deal for five P-8s from Germany in March. Australia ordered a pair of P-8s in January, and the US Navy inked a deal for nine more in April.
Boeing builds 18 P-8 aircraft a year, so this year’s batch of orders should keep its production line healthy.
— with files from BizJournals.com and Boeing