India to push $1.65 bn amphibious plane deal with Japan
05 Nov 2016
India is hotly pursuing plans to acquire US-2i amphibious aircraft from Japan even as it pushes the civil nuclear cooperation agreement with Tokyo. Reports quoting official sources said India has revived the stalled project to acquire a dozen Japanese US-2i amphibious aircraft, worth around Rs10,000 crore.
A decision is expected during Prime Minister Narendra Modi's meeting with his Japanese counterpart Shinzo Abe during the annual summit in Tokyo. PM Narendra Modi's visit to Tokyo on 11- 12 November is expected to further cement bilateral strategic partnership between India and Japan.
While a decision on the much-hyped civil nuclear cooperation agreement still faces political objections, sources say, India's intention to push the $1.65-billion deal to acquire the US-2i aircraft could be a major highlight of the summit.
Modi and Abe will discuss ways of taking forward the $1.65-billion US-2i amphibian search and rescue aircraft deal, during the 11-12 November annual summit.
Reports said India plans to acquire a dozen of these planes that can be used by the Indian Navy and the Coast Guard. It is likely the Navy and the Coast Guard will each have six of these planes.
The Navy and the Coast Guard are seeking 12 to 18 of these planes that could expand their reach and operational capability.
Talks on the amphibious aircraft deal have been going on since 2011, as the two sides explored the possible uses of the aircraft and the mode of production.
New Delhi and Tokyo have also been attempting to iron out all issues related to the purchase of ShinMaywa Industries' US-2i amphibious aircraft and have had discussions with the Japanese government too.
''On Monday, ahead of the India-Japan annual summit, there was a meeting in the ministry of defence to discuss issues related to the viability of acquiring the US-2i aircraft for the Indian Navy and Coast Guard,'' The Financial Express quoted highly-placed sources at the defence ministry as saying.
''There have been series of meetings in the MoD and Monday's meeting was perhaps final discussions before it is put up to the Defence Acquisition Council for approval or acceptance of necessity (AoN). Though India has yet to accept the Japanese offer, there is scope of bringing down the cost of these machines as there has been a price escalation due to the exchange rate – dollar to the yen,'' the report quoted unnamed sources as saying.
''The Japanese side are mulling over waiving off the royalty charges which is around 10 per cent and also waiving off the consumption charges of 10 per cent, adding up to a huge 20 per cent concession,'' the report added.
The Japanese have offered to not only 'Make in India' for the world, but the parts for the aircraft will be manufactured in India, setting up MRO and re-exports. However, sources said, ''That there is still no clarity about the number of aircraft that will be manufactured in India and what components will be allowed to be exported.''
While Japan has not been in the field of foreign military, both India and Japan are wary of China's new assertiveness in the oceans around it and beyond and both will have to work out a mechanism for sale of these planes to India.
