Germany offers India joint defence production for third-party sale

NEW DELHI - Pitching hard to grab lucrative defence deals worth billions of dollars, Germany Monday said it has offered India provisions for forgoing an end user monitoring agreement and transfer of technology in joint production of military hardware for third-party sale in future.

German Ambassador Thomas Matussek told reporters here that, among other things, expanding defence trade ties would be one of the key focus areas during Chancellor Angela Merkel’s talks with Prime Minister Manmohan Singh when he visits Berlin Saturday for a day-long trip.

German and European firms are eyeing multi-billion dollar India defence projects that include a $10-billion jet fighter contract, another worth $600 million for 197 light combat helicopters for the Indian Army, for six mid-air re-fueller aircraft worth $2 billion, and for six submarines worth $11 billion.

“Germany offers technology transfer on a broader scale. We want to offer you perhaps more than competitors. We want to offer you full technology transfer. We offer you to forego the end-user monitoring agreement,” Matussek said about the offer that even India’s close partners like the US insist on.

The EUMA allows the selling party to periodically carry out an inspection and inventory of all articles transferred to India.

Matussek said Germany wanted to develop military hardware “together with India also for later on sale to third countries”.

He said Germany’s Eurofighter is a bidder for the 126 Medium Multi-Role Combat Aircraft (MMRCA) together with three European partners namely Britain, Spain and Italy.

The Eurofighter’s Typhoon is competing against the US’ F/A-18 Super Hornet and F-16IN Super Viper, Sweden’s Gripen, France’s Rafael and Russia’s MiG-35 to win the Indian Air Force’s $10.2 billion project.

“What we are offering is a cutting-edge product. We stand ready to work together with India (for this) platform in future. That means this is not only an offer for sale but a long-term technological cooperation,” the envoy said.

Another contract a European firm is eyeing is light combat helicopters for the Indian Army. The helicopter contract for lifting supplies for troops stationed at high altitudes is worth $600 million.

“We are looking forward to the decision in the competition for 197 light helicopters for the army where Eurocopter is a promising contender. We are quite positive and hopeful on that,” he said.

Yet another contract is the mid-air refueller aircraft for the IAF, which order is worth $2 billion.

The Airbus Corp, the subsidiary of a pan-European Aerospace Corporation, European aeronautic defence and apace aompany, is bidding for re-fuellers.

Matussek said the Airbus Corp has offered “highly” competitive bid to the IAF for six re-fueller aricraft.

“The tender offers option to reconfigure the aircraft for transport, including VIP transport. So you have the aircraft and it is up to you if you want to use it as the re-fueller or as you can chip around the furniture and the interior and use it as a VIP aircraft. I think this has been judged best value for money already a year ago,” the envoy said.

Another key area of defence cooperation, he said, are submarines. India is planning to spend Rs.50,000 crore ($11 billion) to build six submarines.

“So the issue is six submarines. Germany’s Howaldtswerke-Deutsche Werft is contending for the project. This is at a preliminary stage and later on there will be tender offers.”

He said the Indian defence ministry has already forwarded a request for information to the HDW and that has been replied a couple of weeks ago.

Matussek said the two sides would also discuss enlarging the scope of the India-Germany strategic dialogue on key global issues like UN reforms, the international financial crisis, counter-terrorism, non-proliferation and climate change.

The two sides will meet in Berlin after attending the summit of the 27-nation European Union (EU) in Brussels.