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India - procurement in the global market
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| 21 July 2005 |
By Guy Anderson Editor of Jane’s World Defence Industry
India's position as an increasingly significant customer in the world market was emphasised in May 2005. Defence Minister Pranab Mukherjee said that the country would look globally for weapons systems and equipment - a pledge which was interpreted as a clear sign that India was open for business, but appeared at odds with his ministry's repeated declarations of achieving 70 per cent self-reliance in all its defence needs.
It was US President George Bush, however, who sharply focused the attention of western defence contractors on India in April 2005. Mr Bush said that the US was willing to permit sales of jet fighter aircraft to India; a move widely seen as an effort to placate New Delhi following a previous announcement that Lockheed Martin-built F-16s would be exported to its neighbour, Pakistan.
India's intention to shop the global market marks a move away from the procurement policies of previous years, during which it largely relied on domestically produced equipment and Russia for military imports. Indeed, its current aircraft carrier requirement will be met by an agreement with Moscow to acquire the Admiral Gorshkov package, which comprises the Russian 44,570 ton Kiev-class aircraft carrier and a complement of 20 MiG-29K fighters as part of its air group, worth more than USD1.5 billion.
India's domestic industry
It is ironic that slow progress in the reforms of government procurement strategies have held back India's private sector in the domestic market. Corruption has been a significant factor in procurement in the past, and continues to cast a shadow. Most recently a major-general was sentenced to dismissal and imprisonment in March 2005, as a result of an exposé by an investigative magazine, which uncovered senior personnel receiving bribes and demanding `commissions' in 2001. Bureaucratic inefficiency and the lack of clear procurement strategies further compound the problem.
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