India Confirms Purchase of P-8I At $2.1B

According to today’s Times of India, on January 1,  India’s Defense Ministry’s Joint Secretary and Acquisitions Manager (Maritime Systems) signed a purchase agreement with Boeing’s Integrated Systems and in-country lead for eight P-8I Poseidon’s at a price of $2.1B(US),  more than double the previous major US sale to India ($962M for six C-130J in 2007).  It also eclipses the $1.5B purchase (re-negotiated price) of the former Admiral Gorshkov aircraft carrier from Russia, and the $1.1B purchase of the Phalcon AEW aircraft form Israeli Aircraft Industries.  The eight P-8I are slated to replace the eight Tu-142M Bear ASW currently operated by the Indian Navy.  First delivery is slated for late 2012/early 2013 with incremental deliveries thereafter from 2015-2016.  There is also an option to purchase four to eight additional aircraft.

There are several implications – major implications, worth highlighting with this purchase.  The first, of course, is the statement it makes about India’s intentions towards presence and reach into the Indian Ocean and environs.  That much is obvious – the others less so.  One of the sticking points, if you will, about US overseas sales of new weapons systems are the end use agreements that drive safeguards over disclosure of technical details of the system.  These are not unique to the Indian-US deal and in fact, are present with most all such overseas sales and include things like agreement to return key components to the US for repair, agreement not to tamper with or examine software coding, etc.  Some forms of NDA can be pretty intrusive and limiting – and this was something India sought to avoid.  More so, has been Indian insistence ion the past for indigenous production – not just assembly.  That is a key factor driving the current MRCA competition that has entries from the US, Russia and EU presently competing.  Now, it could be that with the limited number of aircraft involved and the concern over the immediacy of replacement of replacing the aging Bears that India was willing to forgo the indigenous production requirement.  There is also a possibility that by “giving” a little here, India seeks more leverage in the MRCA competition for it is clearly interested in acquiring the most advanced systems for those aircraft – chief of which is the most capable version of an AESA radar (as opposed to the “export only” versions).  This has been a sticking point where the Super Hornet, also built and entered in the competition by Boeing, is concerned.  The fact that the signing and ongoing NDA negotiations have been relatively low-key makes us suspect that something like this may be in play — we will continue to observe developments in this venue with much interest.