India's cabinet has approved a proposal to buy 10 American C-17 military aircraft for more than $4 billion, the largest defence deal between the two nations, a defence official said Monday. The deal requires the aircraft maker, Boeing Co, to invest 30 percent of the $4 billion in defence-related industries in India, said the official, who could not be named because he wasn't authorised to discuss the subject.
The approval comes after Boeing and another American defence manufacturer, Lockheed Martin, were rejected for a $11 billion deal to supply 126 fighter jets for the Indian air force. The agreement to purchase the 10 heavy lifting aircraft must be signed by both governments before the manufacturer begins to deliver the planes, said Rahul Bedi, a New Delhi-based analyst for the independent Jane's Information Group.
The C-17 is a large transport aircraft and is used to airlift tanks, supplies and troops as well as perform medical evacuations. It is capable of operating from basic airstrips. Since 2002, New Delhi has become a closer strategic and military ally of Washington following decades of hostile relations during the Cold War-era when it was a close Soviet partner, Bedi said.
So far the largest Indian defence deal with the United States was the purchase of eight Boeing P-8I long-range maritime reconnaissance aircraft for $2.1 billion in 2009. India is expected to spend $80 billion over the next decade to upgrade its military.
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