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Boeing Could Win Another Indian Helicopter Contract

Nov. 20, 2012 - 07:08AM   |  
Boeing, which recently won a deal to sell 22 AH-64D helicopters to the Indian Air Force, soon may be selling another 22 to the Indian Army.
Boeing, which recently won a deal to sell 22 AH-64D helicopters to the Indian Air Force, soon may be selling another 22 to the Indian Army. (Agence France-Presse)
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NEW DELHI — When it comes to selling military aircraft to India, Boeing is on a roll.

After winning a $1.3 billion Indian Air Force contract for 22 AH-64D Apache attack helicopters last month — and getting selected as the preferred vendor for India’s $1.4 billion heavylift helicopter competition with its Chinook CH-47F — Boeing could get another contract, this time for more Apaches to be used by the Army, Indian Ministry of Defence sources said.

The Indian MoD chose the 22 Apache helicopters for the Air Force over Russia’s Mi-28 helicopters.

U.S. firms have already won contracts worth more than $8 billion in the past four years, and most of the weapons and equipment supplied to India have come through the Foreign Military Sales (FMS) route. India contracted 10 Boeing C-17 aircraft for $4.2 billion, 12 Boeing P-3I maritime surveillance aircraft and six Lockheed Martin C-130J aircraft. The other major suppliers in the FMS route have been the Russians.

While the Indian Army had been demanding attack helicopters independent of the Indian Air Force, the Air Force has opposed the plan. A senior Air Force official described the move as the creation of a mini air force within the Army.

The MoD, however, decided last month to allow the Army to use attack helicopters but has not publicly said which service will get the 22 Apaches ordered last month. MoD sources said the Air Force will receive the 22 helicopters.

For Boeing, the order book could remain active, as the Indian Navy has proposed ordering an additional 12 P-8I — for a total of 24 aircraft — through FMS.

The method has become the preferred purchase route for India, as opposed to open competition.

And the FMS route could get busier if the U.S. agrees to dilute legal conditions that include restrictive clauses governing the placement and use of U.S.-bought weapons, an MoD official said.

India has signed restrictive clauses when buying U.S. weapons, a move opposed by senior Indian Navy and Air Force personnel, the official said.

India’s comptroller and auditor general, in a 2008 report, raised doubts over agreeing to such conditions regarding the purchase of an amphibious ship.

“Restrictive clauses raise doubts about the real advantage from this deal,” the report said. “For example, restrictions on the offensive deployment of the ship and permission to the foreign government to conduct an inspection and inventory of all articles transferred under the end-use monitoring clause of the letter of agreement.”

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