To buy Eurofighters, submarines

May 27, 2015 11:31 AM

India has since said the original tender, launched by the last government to acquire 126 Medium Multi-Role Combat Aircraft, is all but dead, but rival jet makers are hoping the $14 billion tender will be reopened

To buy Eurofighters, submarines

Germany's defence minister held out the prospect of more talks on a possible sale of Eurofighter jets to India and, on a visit to New Delhi, said Berlin stood ready to back a multi-billion-dollar Indian submarine project.

Prime Minister Narendra Modi, who has just marked his first year in office, cut through an impasse over a troubled tender for high-end combat jets by announcing a deal in France last month to buy 36 Rafales from Dassault.

India has since said the original tender, launched by the last government to acquire 126 Medium Multi-Role Combat Aircraft, is all but dead, but rival jet makers are hoping the $14 billion tender will be reopened.

The Eurofighter, made by Britain, Germany, Italy and Spain, was knocked out in the final round of the tender by Rafale. But controversy over the lifetime cost of operating the French plane blocked a final deal.

"I again conveyed to the defence minister the interest of the Eurofighter nations in continuing talks, should the Indian side be interested," German Defence Minister Ursula von der Leyen said.

"That was was taken on board positively," she added, after meeting her counterpart, Manohar Parrikar, on Tuesday evening.

Germany has taken the lead in the sales pitch to India for the Eurofighter, made by Alenia Aermacchi, a subsidiary of Finmeccanica, Airbus Group and BAE Systems .

A spokesman for the Indian defence ministry said the focus now was on finalising the government-to-government deal for 36 ready-to-fly Rafales.

Von der Leyen said Berlin was also willing to support a project initiated by India last autumn to build six submarines at an estimated cost of 530 billion rupees ($8.3 billion).

In a first stage, local shipyards would have to prove their fitness to build the diesel-electric subs, before being invited to bid for the deal, possibly with foreign partners.

"There is an Indian interest in industrial cooperation in building submarines," von der Leyen said. "Talks are already under way and I made it clear that German industry is supported by the German government."

Initial talks on submarine cooperation were under way involving ThyssenKrupp Marine Systems, a unit of ThyssenKrupp AG , German media reported.

Von der Leyen met Modi on Wednesday and said the two had touched on the issue of defence equipment, but the conversation focused on sharing knowledge on high-technology areas. ($1 = 64.0200 Indian rupees)