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July 13, 2017

India looks to revive $1.65 bn ShinMaywa US-2i amphibious plane deal with Japan


India and Japan have revived talks on $1.65-billion sale of ShinMaywa US-2i amphibious aircraft to the Indian Navy and a decision is expected by the end of the year.

The Indian Navy and the Indian Coast Guard are seeking 12-18 of these search and rescue aircraft (SAR) to expand their reach and capability. Talking to FE on condition of anonymity, a senior officer said, “Japan is offering the amphibious aircraft for manufacture in India under Prime Minister Narendra Modi’s indigenisation drive.

There have been intense discussions between two sides on reviving the deal that had been put on hold, as both sides have tried to iron out issues that forced the government to push it back. ”

Both New Delhi and Tokyo have been discussing and attempting to iron out all issues related to the purchase of ShinMaywa Industries’ US-2i amphibious aircraft.

Hopefully before the annual India-Japan summit later this year, there will be some decision regarding this, said the source. Given that the navy’s requirement for the search and rescue is limited, the two sides are looking at the possibility of exports to third countries. Tokyo has also suggested manufacturing of spare parts for the aircraft in India and setting up of MRO.

Last November as reported by FE earlier, the proposal for the US-2is was expected to be put up before the Defence Acquisition Council (DAC) for approval or Acceptance of Necessity (AoN). However, it did not come up for discussion.

Since 2011, though the discussions have been going on for this aircraft, there has not been much of an action on the deal so far. According to diplomatic sources, “Recognising the advantage of selling to India, the Japanese government has offered to negotiate much lower price for these machines.”

While Indian Navy has been saying that this aircraft is not its immediate requirement, issues relating to transfer of technology, costs and technicalities of exporting the SAR aircraft have created problems in concluding the contract. New Delhi has been keen on acquiring the ShinMaywa US-2i amphibious aircraft from Tokyo as part of their expanding bilateral strategic partnership, with both nations wary of China’s assertive behaviour in the Asia-Pacific region.

Though the plane is mainly designed for air-sea search and rescue operations, it can also rapidly transport 30 combat-ready soldiers to ‘hot zones’ in an emergency. “The aircraft will give a huge boost to our operational logistics in areas like the far-flung but strategically critical Andaman and Nicobar Islands. It can also land spares and equipment in close proximity to warships on the high seas,” said a navy officer.

Since Tokyo eased its nearly half-century ban on defence equipment exports in April 2014, both countries have been keen on having a military deal. The Indian Navy had sought information about an amphibian plane in late 2010 from Japanese ShinMaywa, Canada’s Bombardier for its CL-415 platform, Russia’s Beriev Be-200 and US/German Company Dornier for its Seastar CD2.

 financialexpress

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