Friday, February 13, 2009

Bangalore: In a shift that has Russia and Europe worried, Israel may have overtaken Russia as the biggest beneficiary of India's defence budget in the last two years, officials in the know said. Also worrying the Russians and the Europeans is the growing importance of the US for the Indian military.
Requesting anonymity, a senior official in the defence ministry said that Russia has been the biggest supplier to India's defence sector for decades.
But it may have lost out to Israel, which seems to have cornered a larger share of India's defence spend recently. "I don't have country-wise data but it may be due to differences over Gorshkov and other Russian programmes," the official said.
The Americans, too, have grabbed significant Indian deals. Worried over the developments, Europeans are hoping that India brings in more transparency and balance to its procurement process. Several European firms at the Aero India expressed concerns over the influence that politics has on the country's defence purchases. Of particular concern to them is the trend of purchases without a multi-tender process.
Over the past few years, India has entered into joint development of several missile systems with Israel as also procurement of top-end technologies without a tender process. After the November 2008 terror attacks on Mumbai, the two countries decided on the joint development of medium-range surface-to-air missiles (MRSAM) for the Air Force.
Another European executive said that some of the biggest deals India has signed with the US, too, have been without an open tendering process. Among them are the purchase of USS Trenton for the Navy and the purchase of C-130 J Hercules transport planes. These were done through the FMS route, meaning a government-to-government deal.
13/02/09 Josy Joseph/Daily News & Analysis

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