September 12, 2016

Japan may cut price to ink aircraft deal with India

Japan is negotiating the sale of Shinmaywa US-2 search and rescue aircraft with New Delhi not for any economic gain, but because it considers India a friendly country , Tokyo has said amid reports that the deal for 12 amphibious aircraft had collapsed over pricing and technology transfer issues. Top Japanese defence ministry sources told TOI in an exclusive interaction that they would look at reducing the price for the $1.6 billion aircraft deal as much as possible, in a fresh attempt to revive the negotiations.
The agreement, if it happens, will have a huge symbolic significance as a message to China about deepening defence and security cooperation between India and Japan, both victims of Chinese territorial aggression. “Our position is that if this agreement happens, it will have a very favourable impact on our relations with India,” said a Japanese defence ministry official.
“We understand there are some consultations under way in India over pricing. Pricing is determined by several factors. We are not doing this for economic gains but for our friendly relations with India and can look at reducing the price to the extent possible,” added the official.Japan is now hoping that there will be some progress in negotiations by the time PM Narendra Modi visits Tokyo later this year for the annual summit meet. After Japan overturned its self-imposed 1967 ban on export of arms in 2014, India was expected to become the first country to purchase defence equipment from Japan with an agreement for US-2 aircraft. India and Japan had last year, after the meeting between Modi and his counterpart Shinzo Abe, signed an agreement for transfer of defence equipment and technology .
The two leaders had then said they wanted to to deepen the bilateral defence relationship through two-way collaboration and technology cooperation, co-development and coproduction.


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