A new State Department-approved deal to sell six more P-8 submarine-hunting aircraft to India comes with the provision that 30% of the acquisition cost be spent in the Indian aerospace sector, an offset in keeping with the government’s push to bolster industrial capacity at home.
The “Make in India” program, promoted by Prime Minister Narendra Modi, has pulled in production on F-16s, P-8s, helicopters and missiles in recent years, as US companies compete hard to win billions in new contracts with a nation seen by Washington as a critical ally in containing China.
Prior to the new deal for six P-8s, Boeing had sold 12 of the aircraft to New Delhi over the past decade, all of which carried the same 30% provision.
The terms of the agreement state that some P-8I parts and components will be made in locally, but Boeing can also get offset credit for components for other Boeing platforms sold to in India.
There are also indirect offsets which involve more than manufacturing like IT, services and tech transfer, as long as they relate to the aerospace industry.
The offset program established between the company and the Indian government kicked off during the 2009 sale. The Indian companies involved in the manufacturing of P-8I parts and components, include those building “structures, composites, electronics and wiring harnesses,” a Boeing spokesperson said.
The local companies include Hindustan Aeronautics Limited, TATA Advanced Materials, BDynamatic Technologies, Bharat Electronics, Electronics Corporation of India, Rossell Techsys, Avantel, Fokker Elmo Sasmos, and Kineco.
“We are committed to delivering offset programs that are in line with India’s Defence Acquisition Procedure and meet the Indian government’s stated goals, including strengthening India’s aerospace capabilities,” a statement from Boeing said.