India and US to bargain hard on defence agreements

India and the US are set to bargain hard on three controversial defence foundational agreements and “pre-bid guarantee” on transfer of technology, in case an American firm bids for ‘Make in India’ fighter jet programme, during the visit of Defence Secretary Ashton Carter here next week.

The US has been pushing India to sign three pacts – Communications and Information Security Memorandum of Agreement (CISMOA), Logistics Support Agreement (LSA) and Basic Exchange and Cooperation Agreement (BECA) – which the previous UPA government had resisted.

However, under the new dispensation, things have changed and India is open to a tweaked LSA, which facilitates the provision of logistical support, supplies and services between the US military and the armed forces of partner countries on a reimbursable basis, and provides a framework that governs the exchange of logistics support, supplies, and services.

Defence sources said “progress” has been made with regard to LSA, but added that it does not mean that it is a done deal.

Even as India holds its cards close to chest, New Delhi has asked the US to make it clear if the American government would stand guarantee for the transfer of technology (TOT) if US-based companies were to bid under ‘Make in India’ fighter jet programme.

“The Americans will have to give pre-bid guarantee if their firm wants to take part in the Make in India programme for fighter aircraft. Companies promise moon but at the end we should not be left with sand in our hands,” defence sources said.

The issues came up for discussion between the defence policy group of the two countries this week ahead of Carter’s visit in India starting April 10. Boeing and Lockheed Martin have expressed interest in setting up a manufacturing plant for fighter jets.

Defence Minister Manohar Parrikar has made it clear that India would be going in for a fighter aircraft under Make in India initiative in the next one year.

New Delhi is looking for additional fighter jets once it signs the Rafale deal with Dassualt Aviation of France.

Swedish firm Saab, makers the Gripen, and French aircraft manufacturer Dassault Aviation have committed to TOT.

US has linked TOT to the three agreements, which they term as “foundational”.