INTERVIEW-Raytheon sees India prospects, plots careful approach

Tue Feb 6, 2007 7:16pm EST

By Andrea Shalal-Esa

WASHINGTON Feb 6 (Reuters) - U.S. defense contractor Raytheon Co. (RTN.N) says India could become its largest overseas growth market over the next five years, but landing contracts there will take patience and persistence.

"We're steeling ourselves to understand that we're not going to make a quick sale. It's going to take some time," retired U.S. Navy Adm. Walter Doran, president of Raytheon Asia, told Reuters in an interview. "We're in this for the long haul."

Doran, who commanded the U.S. Pacific Fleet before joining Raytheon in December 2005, just returned from his fifth trip to India as a company executive, and says Raytheon will soon announce its first partnership with an Indian company.

Such partnerships can help the company lay the groundwork for required investments, or offsets, that India requires as part of its defense contracts.

"We're trying to give the true perception to India that we're not just coming in to sell things, but this is a relationship that Raytheon values and intends to nurture for a long time," Doran said.

Doran has long ties to India, where he arrived in 1979 as a U.S. Navy lieutenant commander to earn a master's degree, along with other defense officials from India, Iran, Iraq and Syria.

"It was an absolutely wonderful year. From a professional point of view it also turned out to be serendipitously important," he said. His classmates included Arun Prakash, who later became an admiral and India's chief of naval staff, as well the officer who succeeded Prakash when he retired.

While he was Pacific Fleet commander, Doran worked closely with Prakash to provide quick assistance to victims of the December 2004 tsunami. The cooperation led to India's acquisition of the USS Trenton, a 17,000-ton warship which is now the second largest ship in the Indian navy.

Doran said the sale of the Trenton on Jan. 17 was important for Raytheon, which built much of the equipment on board. The company hopes to land more work as a mission systems integrator for the Indian navy as it buys over 90 ships in coming years.

The Trenton, now renamed the INS Jalashva, is the first U.S. ship acquired by India.

Back in 2001, Raytheon was the first U.S. company to win a military sale to India after Washington lifted sanctions against the country that year.

It also won some air traffic control work and is helping India with a space-based navigation system known as GAGAN. There is potential for more contracts, given India's plans to modernize 100 airports and build a dozen new ones, he said.

In addition, Raytheon is carefully watching for details of India's jet fighter competition, given Raytheon's role in producing active electronically scanned array radar systems.

Doran said Raytheon, which also builds missiles and air defense systems, was also interested in the Indian army's modernization plans.

Asked to estimate the potential value of the Indian defense and commercial market to Raytheon, Doran said much would depend on how India defined its needs over the coming years.

But he said the company expected to expand its international sales, which now account for 19 percent of annual revenues, to around 25 percent by 2011.

((Editing by Christian Wiessner; Reuters Messaging: andrea.shalal-esa@reuters.com@reuters.net, email: andrea.shalal-esa@reuters.com; +1 202 354 5807)) Keywords: RAYTHEON INDIA/

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