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Obama, Barack

Obama's Decision Signals Shift in Indo-American Defense Ties

Strategic Insights

— 1 min read

U.S. President Barack Obama's announcement of support for India's bid for a permanent seat on the U.N. Security Council marks a significant change in the relationship between the two countries. This decision is expected to boost U.S. companies competing for defense contracts in India, including Lockheed Martin and Boeing. Additionally, the relaxation of export controls for India aims to reduce barriers for commercial companies with potential military applications. Obama's move also follows India's recent access to atomic fuels and technology after an accord with President George W. Bush, which resulted in the lifting of a three-decade ban on exports.

Key Takeaways:

  • Obama's decision to support India's U.N. Security Council bid could give U.S. companies a strong advantage in competing for multimillion-dollar defense contracts in India.
  • Lockheed Martin and Boeing are among the companies vying for F-16 and F-18 deals, respectively, totaling $10 billion for the Medium Multirole Combat Aircraft.
  • The relaxation of export controls for India will provide better access to more sophisticated technology, as stated by S. Chandrasekaran, director of the South Asia Analysis Group.
  • India plans to spend up to $30 billion on its military by 2012 and has inducted a long-range, nuclear-tipped missile into its armed forces.
  • Pakistan has expressed concerns over India's drive for military might, calling it a "massive militarization."
  • India's defense ties with Russia have been strengthened through a related agreement to supply the country with 22 attack helicopters and 15 heavy lift helicopters.
  • The U.S. and India have signed six bilateral agreements and four memorandums of understanding, including one related to the creation of a global center for nuclear energy partnership.

Statistics:

  • U.S. companies stand to gain from a possible $10 billion contract for the Medium Multirole Combat Aircraft.
  • India's defense spending is expected to reach up to $30 billion by 2012, a 24 percent increase from last year.
  • Pakistan has expressed concerns over India's military spending, which has been spurred by a 24 percent increase in defense budget.
  • 22 attack helicopters and 15 heavy lift helicopters will be supplied to India under a related agreement with Russia.

Sources:

  • UPI (Nov. 11)
  • South Asia Analysis Group (no specific date mentioned)

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