Western Powers Rush To Court PM Narendra Modi With Eyes On Lucrative Defence Deal


All the countries are trying hard to have a deal with India for instance Britain has drawn some cheer from the slow progress of the negotiations for the Rafale deal and U.S. government officials are pushing hard for $2.8 billion in delayed sales of Boeing's Apache attack and Chinook military transport helicopters to be among the first completed under the new government, according to sources familiar with the issue. "I don’t think it’s a competition," U.S. Assistant Secretary of State Nisha Biswal said after an early post-election visit to New Delhi. "India will have strong and positive relationships with a variety of countries and that is to be encouraged," said Biswal. "We want to see India taking on a stronger and a leadership role in the region and around the world so we welcome that."

India makes few of its own weapons, beyond ballistic missiles and assembly lines for foreign jets and for this it has spent some $6 billion last year on weapons imports. The government of India has started allowing manufacturers to build more defence components without licences, and had made it easy for the Indian firms to partner foreigners. At present foreign companies can only invest 26 percent in defence projects without committing to technology transfer, which has put off many investors.

According to the Commerce and Industry Minister Nirmala Sitharaman said foreign investment in the sector would help increase the defensive preparedness of the country and reduce its dependence on imports, saving billions of dollars in foreign exchange. However, she said the government was yet to take a final call on increasing the FDI ceiling and the decision would be taken by Jaitley and Modi. The proposals also face pockets of resistance in India's industry, Modi's party and the military establishment.