Under the offset provisions, the Indian government requires the winning bidder in a military tender valued at more than $300 million to source production and services of at least 30 per cent of the contract value through local vendors. In the case of the MMRCA contract the offset requirements are higher – at least 50 per cent.
Lockheed has offered its scaled up Block 60 F-16IN fighter in the competition which also features Boeing's F/A-18E/F Super Hornet, the European Aeronautic Defence and Space Company's Eurofighter Typhoon, the Swedish Saab Gripen's JAS-39, the French Dassault's Rafale and the Russian MiG-35.
"We've signed these memorandums of understanding with the Indian industry in anticipation of the Indian Air Force's medium multi-role combat aircraft order," Orville Prins, Lockheed's vice-president for business development in India said. Lockheed's agreements include developing a simulator for the C130J Hercules transport aircraft with Mumbai-based Mahindra & Mahindra Ltd, a top Indian utility vehicle maker. The IAF has already contracted for the supply of six of these classic military transporters with options for at least six more.The $1 billion deal was of immense significance for the US government and contractors as it broke a decade's long drought of near-zero sales by American companies to this country.
Lockheed said it is also developing a flight refueling system with state-run Hindustan Aeronautic Ltd. Other foreign partners on this project are Israel Aerospace Industries Ltd. and Sargent Fletcher Inc.
"In Asia, India is the most significant opportunity," said Ralph Heath, executive vice president at Lockheed Martin and president of Lockheed Martin Aeronautics Co."The Border Security Force has expressed interest in one or two C130J planes," Heath added.
He also said that the company was looking at partnering Indian companies in developing products for the global market. "There is technical expertise here that will add value to Lockheed Martin's products...so we are seeking a two-way partnership to benefit all," Heath said."
In fact, the Indian Navy has expressed an interest in the F-35B which has short-takeoff and vertical-landing capability for aircraft carrier operations," Prins informed the media. "It (the F-16) is the bridge to the F-35 for India."
The fifth-generation F-35 Lightning II joint strike fighter is currently being developed with first deliveries slated for 2010. Lockheed, Pentagon's biggest contractor by sales, is also looking at civil contracts from the Indian government.
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