December 6, 2007 / 6:59 PM / 12 years ago

U.S. fighter bids for India hit tech-transfer snag

WASHINGTON (Reuters) - A split in the Pentagon over how much cutting-edge technology to share with India is complicating bids by Lockheed Martin Corp (LMT.N) and Boeing Co (BA.N) for a potential $10 billion fighter jet contract.

In this U.S. Army handout photograph, which was released on August 24, 2004, a U.S. Army F-16C Fighting Falcon launches flares during a combat mission over Iraq. A split in the Pentagon over how much cutting-edge technology to share with India is complicating bids by Lockheed Martin Corp and Boeing Co for a potential $10 billion fighter jet contract. REUTERS/Ho

At issue, among other things, is advanced radar know-how India wants as part of any deal for the 126 new fighter jets it plans to buy from one of six global aerospace powerhouses, say current and former Pentagon officials.

Detailed offers from all bidders are due to be submitted to the Indian defense ministry by March 3.

The contenders come from Russia, Europe and the United States. If the deal goes to Americans, it would crown a post-Cold War trend toward tighter U.S.-Indian security ties, a potential counterweight to China’s growing might.

Lockheed Martin and Boeing — the Pentagon’s No. 1 and No. 2 suppliers by sales — were invited by India for the first time to bid to supply fighters.

Lockheed Martin is proposing a version of its widely sold F-16 Fighting Falcon but has not made public any detail of which radar it will offer.

Boeing has said it is pursuing U.S. government approval to sell its F/A-18 Super Hornet “Block 2” strike attack aircraft, used by the U.S. Navy and Australia. It is equipped with what Boeing has called “ground-breaking” Raytheon Co (RTN.N) APG-79 Active Electronically Scanned Array (AESA) radar.

Also in the race: Russia’s MiG 35, France’s Dassault Rafale, Sweden’s Saab AB (SAABb.ST) JAS-39 Gripen and the Eurofighter Typhoon, made by a consortium of British, German, Italian and Spanish companies.

“There’s advocates and non-advocates” of meeting India’s hopes for maximum radar technology-transfer and co-production, said a senior U.S. Air Force official, who declined to be named.

Asked about deliberations on licensing the so-called AESA radars for export to India, U.S. Navy Secretary Donald Winter told the Reuters Aerospace and Defense Summit: “I know that that’s under consideration.”

“There’s a very well detailed process that is followed by the department (of defense) that I’m not expert on, and I would defer to those who are,” Winter said on Wednesday.

The trade-offs involved in U.S. reviews are complex. They include business pressure to make Lockheed and Boeing as competitive as possible while protecting a key U.S. war fighting technology.

“The Indians want as much co-production and as much technology transfer as they can get,” said retired Air Force Lt. Gen. Jeffrey Kohler, who stepped down in August as the Pentagon’s top arms-sale official. “The U.S. government has to decide how far it will go toward meeting India’s requests.”

“I think this a very critical decision that needs the attention of top government officials,” said Kohler, now an unpaid advisor to the private U.S.-India Business Council.

Ron Somers, president of the council that represents 275 of the biggest U.S. companies investing in India, referred to India’s fighter market as “a tremendous opportunity for U.S. companies that should not be missed.”

“We hope the U.S. government will get its act together,” Somers said by telephone. “Time is of the essence if we hope to compete with foreign companies for this hugely important deal.”

Lockheed Martin and Boeing declined to comment on the U.S. government’s delay in approving their India packages, as did the Indian embassy in Washington.

Bob Gower, vice president of Boeing’s F/A-18 program, said Boeing was confident the U.S. government ultimately will clear release of the APG-79 radar.

“The F/A-18 has an advantage in that we are the only airplane in the competition with a fielded production AESA radar,” Gower said in a written response last month to questions from Reuters. “I like our competitive position on the AESA radar.”

AESA presents many military advantages, boosting pilots awareness of any threats, according to William Ostrove, a radar market analyst at Forecast International, an aerospace consultancy in Newton, Connecticut.

“The United States has the most advanced AESA technology in the world,” he said. “No other country currently has an AESA radar in production.”

The United States already has sent AESA technology to Singapore and the United Arab Emirates, but they did not demand as much access to the underlying know-how as India has done, Ostrove said.

Washington might resolve its AESA-related dilemma by clearing a “dumbed down” version, he said. Substituting a less powerful processor, for instance, would make it less capable than one now flown by U.S. Navy F/A-18E/F Super Hornet pilots.

“This would allow the Indians to build the radar themselves while preventing the most advanced American technology from leaving the country,” Ostrove said.

As part of a strategic initiative designed to cement new

security ties, President Bush in March 2005 gave Boeing and Lockheed the nod to sell advanced fighters to India.

(For summit blog:

Editing by Tim Dobbyn

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