The Indian Navy is planning to buy 120+ multi-role helicopters in a tender worth $8B. The Navy already asked helicopter manufacturers for details. Lockheed-Martin (NYSE:LMT) and United Technologies Corporation (NYSE:UTX) stand a good chance with the MH-60R Seahawk. Conditions required in the deal are possibly technology transfer and probably local assembly or co-manufacturing.
In this decade, the Indian armed forces are going to acquire more than 1000 new helicopters to replace aging helicopters in their inventories. India wants to rely less on Russian equipment, which offers opportunities for aerospace manufacturers from the US and Europe.
The Indian Navy requires a anti-submarine warfare, anti-surface warfare and special forces operations capable multi-role helicopter. The Lockheed-Sikorsky - as Lockheed calls it - MH-60R Seahawk is the likely candidate that will be offered, considering the requirements. Sikorsky is the helicopter division of United Technologies Corporation.
Although the MH-60R is based on the Sikorsky Black Hawk helicopter, the Lockheed Martin Common Cockpit (which is a glass cockpit) is used.
- Airbus Helicopters (OTCPK:EADSF) will offer the EC725
- NHIndustries will possibly offer the NH90 helicopter. Airbus Helicopters owns 62.5% of NHIndustries and Finmeccanica (OTCPK:FINMF) 32%
- AugustaWestland, which is 100% owned by Finmeccanica, will probably offer the AW101
It is possible that AgustaWestland will be excluded (or not get the contract) because there is a corruption scandal with selling AW101 VIP helicopters to India.
This month Airbus formed a new subsidiary to integrate all Indian activities and Hindustan Aeronautics Limited [HAL], India's major aerospace manufacturer, already cooperates in developing and building the A320neo, A350XWB and A380.
There are 2 important reasons why the combined Lockheed Martin/Sikorsky proposal will not get the order:
- Technology transfer. At this moment, it is not known which technology will be offered. When some technology can not be exported and other - less advanced - technology is used, this could lead to a failure to get the contract;
- Considering the size of the order local participation (and probably assembly) of Hindustan Aeronautics Limited [HAL], HAL is India's major aerospace manufacturer.
Both will be important considering India's wish to grow its own aerospace industry. Choosing the Dassault Aviation Rafale as the India's new fighter aircraft depended for a large part on sharing production with HAL. This is detailed in Dassault Aviation: Purveyor Of France.
The Indian defense market is an important market, and India has the 8th largest defense budget in the world. India cannot afford to cut defense spending considering the regular problems (and wars) with Pakistan and China.
Both Lockheed Martin and UTX should be able to benefit from India's policy of decreasing its dependence on Russian equipment, which is becoming obsolete now.
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