'US must assure dependable supplies'

To get orders vendors should outsource and transfer technology

Defence Minister Pranab Mukherjee said future defence aviation procurement would be linked to the willingness of the suppliers to transfer technology and offer outsourcing contracts to Indian firms such as HAL, on day one of the Aero India 2005 here on Wednesday.

Money does not seem to be a problem. What has been allocated is being steadily spent. In the nine months to December, "We have already spent 73 per cent of this year's defence budget, including Rs 26,000 crore under the capital budget head," Mukherjee told reporters after inaugurating the trade show.

Plus, more is coming. The minister hinted that there would be a hike in India's defence budget, come February 28, but "no finance minister worth his name will simply agree to everything his colleagues demand... There will be discussions and without touching off an arms race, we will ensure that our armed forces get state-of-the art equipment," he said.

On buying more defence equipment from the United States, including fighter aircraft, the minister said "any supplier in general has to assure us dependability of supply and transfer of technology and we don't want to be victims of the national laws of another country".

He was "glad that the US has shown interest in participating in a big way in the Aero India show" and the government would hold discussions with them "on defence procurement".

India might be prepared, under the right conditions, to buy defence hardware from the US as "no position (such as the US' unease over India's nuclear doctrine) is irreconcilable... The Pressler Amendment was amended for a one time waiver to meet some commitments to another country," he recalled, referring to the intended sale of US F-16 fighter aircraft to Pakistan.

India's nuclear policy, which had been clearly spelt out, would be less of an obstacle in procuring arms from the US, than US laws themselves: "Because of US laws, sometimes the administration is compelled to impose sanctions on some countries. Once this happens then any kind of deals or transfer of technology will not happen," he said.

Earlier, at the inauguration of the trade show, the defence minister said, "There is tremendous scope for outsourcing from India in areas where the (Indian) companies are competitive. This event would provide that opportunity for exploring possibilities."

The Indian aviation industry was one of the largest in Asia, with capability in manufacture and maintenance of aircraft, engines, accessories and avionics.

The country's strategy for self-reliance had resulted in the development of materials, advanced alloys, composites, process technologies and aircraft equipment. The Indian aeronautical industry was not only concentrating on military aircraft production, but also had dedicated facilities for commercial aircraft manufacture and maintenance.