Defence key driver as USISPF holds summit

IDD Bureau

With the defence sector expected to play a ‘major-role’ in increasing India-US trade, the  US-India Strategic Partnership Forum (USISPF) will convene the largest gathering of over 300 private sector executives, global CEOs, besides US and Indian government leaders  at its second ‘Annual Leadership Summit’ in New Delhi on October 21.

The theme of the summit—“Partners For Growth”— will be a full spectrum discussion on the current positions and the growth trajectory of the U.S.-India bilateral ties.

A USISPF estimate, made in its ‘US-India bilateral trade report’ produced, recently said that by 2025, bilateral trade could range between $283 billion to $327 billion, at an annual average growth rate of 10%-12.5% (as witnessed in 2017 and 2018). This hinges on the ability of the two governments to ‘re-start’ the relationship and if India can adopt new policies that enable growth in technology-driven exports and digital-based services. The USISPF is a non-profit organization, with the primary objective of strengthening U.S-India commercial and strategic partnership.

The Defence equipment angle:  India’s status was cemented as “a Major Defence Partner” of the US through STA1 and Defense Technology and Partnership Act.

The signing of the COM-CASA will ease the exports of defence goods and technology exports from the US to India. At present negotiations have been finalised on the purchase of 24 Lockheed Martin-Sikorsky MH-60 Romeo maritime helicopters valued at approximately $2 billion ( approx Rs 14,000 crore )

Last year, the Indian Army started inducting the M777  ultra light howitzer  made by BAE Systems. It was worth $ 660 Million (approx Rs 4500 crore) and through the foreign military sales (FMS) route.

Meanwhile the Indian Navy needs 123 Naval multi-role helicopters and another 118 Naval utility Helicopters (NuH). The Expression of Interest has been submitted. Besides two US companies – Bell Helicopters   and Lockheed Martin —  Europe’s Airbus Helicopters and Russia’s Kamov  are in the race. The selected company will have to partner an Indian company for the $ 3 Billion (approx  Rs 21,000 crore) deal.

Indian Navy is also looking at additional 12 Boeing P8-I surveillance aircraft and 22 off the Sea Guardian UAVs.

According Swedish think-tank Stockholm International Peace Research Institute (SIPRI), titled “Trends in World Military Expenditure, 2018” which studied the period 2014-18 listed India as second largest importer of weapons. The US was the third largest supplier accounting for some 12 per cent of these weapons.

The USISPF ‘US-India bilateral trade report’ cites unnamed defence industry experts to say “India’s defence market is estimated to touch $70 billion in a decade. MoD’s planned expenditure circa $250 billion for acquisitions over the next decade provides tremendous trade and investment opportunities to American Aerospace companies”.

According to the US Department of State, Indo-US defence trade is expected to grow to $18 billion by end of 2019.

The US pre-approved offer to India, for sale of 22 Guardian drones and the partnership to develop and manufacture the F-16 Block 70 in India will boost U.S. export numbers. U.S. company  Boeing, has also partnered with both public and private sector partners in India to manufacture the F/A-18 Super Hornet.

Earlier, the contract for 22 AH-64E Apache heavy attack helicopters for the Indian Air Force was signed in September 2015, the first batch has been inducted.  The IAF also wanted  15 heavy lift Chinook CH47 that have also started  inductions.  Both the copters were part of the Air Force day parade on October 8 , marking an important change and indicating more trust in India-US ties. IAF had been using Soviet/Russian copters for the attack role and the heavy lift role.

The U.S has also approved a $930 million direct commercial sale of six Boeing to India by 2020 for the India Army.

Boeing and Lockheed Martin are in contention to supply 110 fighter aircrafts to the Indian Air Force.

The Speakers at the USISPF event: Among those expected to be speaking at the event are likely to include, Minister of External Affairs, Dr. S. Jaishankar; Minister for Petroleum & Natural Gas & Steel, Dharmendra Pradhan; Minister of Commerce and Industry & Railways, Piyush Goyal; Minister of State for Finance & Corporate Affairs, Anurag Thakur; Ram Madhav, National General Secretary of the BJP.

From the US the speakers expected are:    Former US Secretary of State, Dr. Condoleezza Rice; Former US Secretary of State, Dr. Henry Kissinger; Technical Advisor of Alphabet Inc. and former Google CEO Eric Schmidt; President & CEO, Bank of the West, Nandita Bakhshi; Chairman of PwC Global Bob Moritz; President of Emerson Mike Train, Chief Legal & Policy Officer, Netflix, David Hyman, among many others.

IDD Comment: India US ties have potential to grow to new levels. The  agreements like COMCASA and the LEMOA indicate growing trust. India can open its doors to US industry to allow them to come and manufacture  here. India has shed its Cold war era fears and mindset, time is now to make it work.

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