Boeing
1:37 pm
Thu April 28, 2011

Boeing out of Indian defense deal

The U.S. Embassy in New Delhi says that two American makers of fighter jets are out of the running for a multibillion dollar contract for the Indian air force.

The defense arm of one of the two American companies, Boeing Co., is based in St. Louis.

Boeing Co. and Lockheed Martin were both bidding for a slice of the $11 billion Indian deal for 126 fighter jets.

A statement from U.S. Ambassador Timothy J. Roemer says that the news from India's Defense Ministry was "deeply disappointing."

Indian news reports say that of six companies in the running only German consortium Eurofighter Typhoon and the French company Dassault Aviation were still being considered.

Indian officials were not immediately available for comment.

Roemer also resigned from his position today, citing "personal, professional, and family considerations."

"When I accepted this job two years ago, I told President Obama that I would serve for two years but that family considerations would be front and center after that," Roemer said in a statement.

In the same statement, Roemer highlighted the area of defense during his tenure, and specifically mentioned the pending sale of Boeing's C-17 and the sale of Lockheed Martin's C130J aircraft:

During my tenure as Ambassador, the U.S. - India defense partnership has expanded exponentially.  The sale of C130J aircraft and the pending sale of C-17s strengthen the strategic partnership between our two countries, and demonstrates our enduring commitment to sharing the world's best technology with India.  Our defense partnership offers economic benefits for both India and the United States and significant job creation in both countries.   is expected to spend $80 billion over the next decade to upgrade its military.

The Times of India shares Boeing's response:

"We are obviously disappointed with this outcome. We believe we offered the Indian Air Force a fully compliant and best-value multi-role aircraft for the defined mission," the company said in a statement, adding, "We will continue to look for opportunities to help India modernize its armed services and enhance its aerospace industry."

Nitin Pai, a geopolitics fellow at the Takshashila Foundation, a non-partisan Indian think-tank, also shared his view on the decision with the Times:

"The UPA government's decision to reject both American proposals, of the F-16 and F/A-18, demonstrates either a poor appreciation of the geostrategic aspect or worse, indicative of a lingering anti-American mindset," said Nitin Pai, a Fellow at the Takshashila Foundation. "This move will most certainly reduce India's geopolitical leverage with the US military-industrial complex, at a time when India needs it most."