Business Today

Buy American!

The End-Use Monitoring Agreement (EUMA) is controversial, but it only serves to highlight the amount of military hardware India is buying from the US.

Kushan Mitra | Print Edition: August 23, 2009

When Gursharan Kaur, wife of Prime Minister Manmohan Singh, launched the INS Arihant recently, it also signalled the end of an era of India’s dependence on Soviet/Russian military hardware. The reason: there is a new interloper in town, the Americans.

What India Is Buying
3 Boeing 737 BBJ jets
6 Hercules C-130J medium-lift planes
8 P-81 maritime reconnaissance aircraft

In the past five years, India has made significant purchases from the US such as the amphibious assault ship USS Trenton, three Boeing 737 BBJ jets, six Hercules C-130J medium-lift planes and eight Boeing P-8I Maritime Reconnaissance aircraft. These deals will cost the exchequer around $4 billion. When US Secretary of State Hillary Clinton came down to India recently, she pushed India to sign the EUMA to keep the flow coming.

The deal allows the US to periodically inspect the hardware and requires India to seek US permission to make any alterations. So, what made the government to sign the deal? The answer might lie in India favourably considering US hardware for very large deals, particularly the Multi-Role Combat Aircraft (MRCA) order. This $10-billion order will be India’s single-largest military purchase and American firms are competing hard to bag the deal. According to most defence analysts, the Boeing F/A-18E/F Super Hornet is considered the favourite to win the order.

However, every large purchase made from the US has to be approved by an US Congressional Committee, and without the EUMA the US Congress was unlikely to clear such deals.

With the UPA government putting added emphasis on defence, India is likely to be a huge customer over the next few years.

The world wants to be green
A NASDAQ-Landor survey, across the US, the UK, China, Brazil, India, Germany and France shows most people want their countries to turn green.

  • 73 per cent Chinese and 78 per cent Indian consumers say they will spend more on green products in 2010
  • 87 per cent Indians and 98 per cent Chinese feel a company’s green reputation is an important purchase consideration
  • Over 50 per cent of consumers in the UK, France and Brazil believe that the state of the environment in their country is on the wrong track
  • India and Brazil are the only two countries where consumers expressed more concern for the environment than for the economy

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