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U.S. firms out of India aircraft deal

April 29, 2011 at 12:15 AM   |   Comments

NEW DELHI, April 29 (UPI) -- U.S. aircraft giants Boeing and Lockheed Martin have lost out on a $10 billion contract to build new-generation fighter planes for India, officials said.

The companies had been vying for the lucrative deal to provide more than 120 of the new-generation combat planes to the Indian air force.

The Eurofighter and France's Dassault Aviation remain in contention for the contract, which may be decided in the current fiscal year, Indian Defense Ministry spokesman Sitanshu Kar told CNN.

"Boeing and Lockheed have been eliminated in the elimination round [of the bidding]," Kar was quoted as saying.

Timothy Roemer, who is resigning as U.S. ambassador to India for personal reasons after being on the job for two years, said the Indian government's decision was being reviewed but added: "We are, however, deeply disappointed by this news."

Roemer said the United States looked forward "to continuing to grow and develop our defense partnership with India and remain convinced that the United States offers our defense partners around the globe the world's most advanced and reliable technology."

The new U.S.-India defense partnership covers trade and technology transfer and calls for enhancing military relations. U.S. President Barack Obama visited India last year, further strengthening bilateral relations, which took off during the administrations of Presidents Bill Clinton and George W. Bush and included the signing of the civilian nuclear deal during Bush's term.

The Los Angeles Times reported Obama would have benefited politically if Boeing's F/A-181N Super Hornet or Lockheed's F-161N Super Viper had been chosen for the Indian warplane deal, as it would have sustained about 27,000 jobs.

"This type of technology is only provided to our closest allies and partners," Obama had written in February to Indian Prime Minister Manmohan Singh, the report said.

However, the competition will now be between France's Rafale and the Eurofighter Typhoon, built by a consortium of Italian, Spanish, German and British companies, the Times said. Others bidders rejected were Russia's MIG-35 and Sweden's JAS-39 Gripen.

Analysts told the Times while the Indian decision may create some strains in Indo-U.S. ties, they don't think it would hurt them fundamentally, as U.S. companies already have won several other major defense deals in India, described by the Stockholm International Peace Research Institute as the world's largest arms importer.

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