Government-Government Deals Leading To Quicker Defence Procurement Than Global Tenders In India

  • Our Bureau
  • 12:54 PM, January 3, 2017
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Government-Government Deals Leading To Quicker Defence Procurement Than Global Tenders In India
India signed a government-to-government deal to procure 36 Rafale fighters from France in September 2016

The Indian MoD has shown a preference for government-to-government (G2G) deals instead of direct commercial negotiations with companies producing armaments over the last couple of years.

Some of the major G2G deals include procurement from France, US, Japan and Russia.

Russia and India have signed defense deals worth billions of dollars on missile systems, helicopters, and frigates during the BRICS summit in October last year.

Key agreements signed on October 15 included deals under which India would procure Russian S-400 Triumf missile systems that can be used against aerial targets within a 400-kilometer range, joint manufacture of Russian Kamov 226T helicopters, and procurement of four 11356 frigates for the Indian armed forces.

India in December last year signed a $750 million Foreign Military Sales contract for importing 145 BAE Systems' M777 lightweight Howitzers from US.

India signed a contract to procure 245 Stringer air-to-air missiles as well as launchers and related engineering support services from Raytheon as part of a wider FMS agreement between India and the US, worth $3.1 billion, which included combat helicopters, weapons, radars and electronic warfare suites in March 2016.

India also requested the US government for the supply of 22 Harpoon missiles for $81 million from Boeing under the FMS program in September 2016. Boeing has also agreed to offer KC-46 aerial tanker through FMS route.

India signed a €7.87 billion contract with France for 36 Rafale fighter in September 2016. The Indian government is likely to choose G2G path for the acquisition of 12 Japanese US-2  amphibious aircraft for the Navy for US $1.4 billion.

India is also likely to choose G2G route for the procurement of 44,000 close quarter battle (CQB) carbines instead of opting for the global tendering process for the Army. The country still needs to be decided.

Global tenders floated over the last few years have led to delayed procurement due to extended evaluation of all contenders’ equipment and allegations of agents influencing procurement decisions. A case to point is the AgustaWestland deal in which the Anglo-Italian company allegedly paid bribes to have its helicopter selected over that of Airbus Helicopters (then Eurocopter) and Russian Helicopters.

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