Delhi's defence deal

The Indian Ministry of Defence has established a Monday bidding deadline for a $10 billion fighter jet deal.  Eyeing a piece of the action are US defence contractors Lockheed Martin and Boeing, as well as competitors from Russia and Europe.  But snaring the tiger will be tricky.

The contract is freighted with significance in both strategic and commercial terms.  Delhi is undertaking an ambitious military modernisation campaign that will rely on foreign partners, since indigenous production capacity is limited.  It comes as the South Asian giant moves away from its traditional focus on Russia for its defence needs.

India has been very cagey about its deliberations and has refused to name a potential favourite -- despite heavy courting by foreign potentates.  French President Nicolas Sarkozy, Russian Prime Minister Viktor Zubkov and US Defense Secretary Robert Gates have all made recent sojourns to Delhi.

Lockheed Martin has already secured a deal to supply India with six transport planes, and Washington hopes that this bodes well for the US bidders.  However, while the US-India relationship has warmed considerably, irritants persist -- not least the failure to complete a landmark civilian nuclear agreement.

Delhi is anxious to demonstrate its foreign policy independence and does not want to be reliant on any one partner overseas.  It also wants access to cutting-edge technology.  The winning bids will have enticing joint production provisions and guarantee that the bulk of manufacturing occurs within India.