The Boeing Company Chairman James McNerney, who was in India to participate at the 'India's Time To Fly' Summit organised by his firm in association with IIT-Bombay here today, said he believed there could soon be a campaign to meet more combat planes requirement of the Indian Air Force (IAF) and that Boeing's offer would include a 'make in India' plan for those combat planes.
His comments are interesting for the simple reason that India had in August 2015 announced the scrapping of its 2007 tender for 126 Medium Multi Role Combat Aircraft (MMRCA) following Modi's decision in April that India would directly buy 36 Dassault Aviation's Rafale combat planes from the French government to meet its air force's immediate operational requirement. Boeing had pitched its F/A-18 in the now-dead MMRCA tender. Since April 2015, the top leadership of Swedish Saab has pitched its single-engine Gripen fighter and the American Lockheed Martin has offered to seel its F-16 combat jet to India.
IAF chief Air Chief Marshal Arup Raha had said in his annual press conference ahead of the Air Force Day on Oct.8 that he was looking at have six MMRCA squadrons in the fleet and the present 36 Rafales would only cater to two squadrons.
That leaves open an opportunity for leading global combat plane manufacturers to launch a campaign to sell at least 153 more MMRCA to India, in case the IAF requirement continues to be the same as in the 2007 tender, when it was indicated that a 126-plane purchase could have an additional 63-plane follow-on option.
"There will be a fighter (plane) campaign in this country over the next couple of years. Our approach is going to be to take a current, state-of-the-art fighter and bid. The quantities are uncertain, but the numbers are going to be significant. Our bid will include a proposal to make the plane here," McNerney said at the Boeing Summit. He was giving an example of a 'Make in India' and technology transfer programs that Boeing could do.
"On the defense side, the two governments have to decide what technology they want to share or not. Leaving that aside, and generally speaking, the more cutting edge the technology, less the sharing will be. Now, that (fighter plane offer) is different and very different. The value to India is a very modern production system, integrated to make a very sophisticated machine. That kind of industrial base capability is as important as the fighter (plane) itself. These modern manufacturing techniques can go into many different industries," he said.
The Boeing chief also said that they were now closer to setting up an assembly line for either the Apache attack choppers or the Chinook heavy transport military helicopters in India. He did not specify which one of the two helicopters would that assembly line be for. Boeing had on Sep.28 signed two deals, cumulatively worth $3.1 billion, with India for the two helicopters.
"The Apache is an attack helicopter and the Chinook is a heavy transport helicopter. Both are critical for defense. Largely, (we are) assembling one of those here. We are much closer to have assembly line of one of those airplanes here. That will play out and that's our strategy. This market is too important, the capability is too high, and the commitment is significant," he said.
McNerney admitted that it was the India-U.S. civil nuclear agreement (of 2005) that made it easier for all the defense deals between the two nations to happen. "That (civil nuclear deal) unlocked everything, in terms of g-to-g relationship and opening for more strategic technology sharing. All those deals on the defense side were all done after the civil nuclear deal. None of them were done before that. It wasn't possible at all."
India bought its first American defense product in several decades in 2007 when the U.S. sold its USS Trenton amphibious warfare ship to India. It now serves the Indian Navy as INS Jalashwa. Since then, U.S has surpassed Russia as the largest supplier of arms to India in the last four years. In the last decade, U.S. has notched up an impressive $12-billion defense sales to India, a large chunk of it going to Boeing, including for its C-17 heavy cargo for $4.1 billion and P8-I long range maritime surveillance planes for $2.1 billion.
The Boeing chief also said that when he got to meet Modi during the CEOs interaction during the Indian Prime Minister's U.S. visit in September, the discussions were "not cheer-leading" but were "real issues". He said there were much that needed to change in terms of taxation, regulatory frameworks in India. But the Modi government's commitment was encouraging. "They are now listening to what we have to say."
He was also all praise for the Indian armed forces and their procurement of military hardware. "The Indian military capability is well organised and strong. As I compare with places around the world, they (Indian forces) know what they want. The leadership of the government and the new prime minister have been very strong on national defense.
"The neighborhood can be a little shaky. This commitment (for defense of the nation) makes sense. Geo-politically, it makes sense. And so, compared to other places, they (Indian forces) know what they want and are clear about it. There is normal push and pull, that also happens everywhere in the world. There is this bureaucratic back and forth that happens. Sure, there are changes (in India). I have been to a lot of places around the world where the specifications change three or four times over the course of a five-year discussion. We have lesser than that here. Hence, it is a pretty good group of forces."
McNerney said 'Make in India' is a very important initiative for the country. He said the Modi government's initiative would ramp up the deployment of the capability that India possesses in manufacturing, design and development two or three levels higher.
"It is not about someone handing you a blueprint and you making it. The vision of the prime minister is more than that. The 'Make in India' is to design and make for India, and for India and the world. We think, with the global nature of our products, we can play a part here. If politics allows this initiative to continue for five years, then it will take the manufacturing economy of India from its 14 per cent now to nearly 25 per cent in the next five years."
The Boeing chairman said India would remain "a big player" on the global scale and it was "starting to be", being the "fastest growing" economy in the world.
"You have a democracy that make it easier to work with. There are other things. I think all the capability is here in programs that I want to make here - even assembling entire airplanes - wings, fuselage and other machines that make the airplanes work. We are committed to taking the Indian capability to that level."
He said it was a win-win for Boeing and India. "I see an opportunity to move India up by bringing in new technology, know-how. As the defense and space industry in U.S. became a repository of technology in the 1960s, a similar thing can happen here. It is a strategic commitment. We will get more business and India will get more know-how."
McNerney said The Boeing Company was in discussions with Indian partners for its entire portfolio or products. "There are very few country where Boeing's complete portfolio can find natural partners within. India was an ally and also had a huge market. This is a very unique opportunity for Boeing."
He also said the assessment was that there would be a 1,800-plane commercial airplanes sold in India in the next 20 years and that market was worth $800 billion. Boeing caters to a large chunk of Indian commercial aviation fleet.
Boeing India President Pratyush Kumar, in his opening remarks at the Summit, said, "India is now ready for aerospace manufacturing. Boeing is creating an ecosystem for aerospace research and development in India. Boeing is partnering with India in aerospace to make the country part of the global aerospace industry."