India-US relationship and Air India’s $6.6 billion purchase
While India is yet to decide on the United States’ offer to sell military aircraft to India, Air India, the country’s state-owned airline, has announced its decision to procure 50 commercial airliners from Boeing. The order includes 27 of Boeing’s new 787s, 15 777-300 ERs and 8 777-200 LRs and needs bureaucratic and political approval before it goes through.
The decision to purchase American airliners comes after the recent signing of an “open-skies” deal between India and the United States. It is a reasonable guess that India’s decision to give Air India’s custom to an American manufacturer is the icing on the cake. Airbus, Boeing’s archrival, is already crying foul, even though it won an earlier deal from Indian Airlines, another state-owned carrier. Airbus is also likely to be the primary supplier to private carriers like Jet Airways who, as a result of the open-skies deal, will need to expand their fleets.
Whatever be the motivations behind Air India’s order, it certainly is good news for the fast-developing US-India relationship. It also calls to attention the fact that there is much more to bilateral relations than the sale of military aircraft. While opinion is mounting that India should decline the Bush administration’s offer of F-16s (as Kaushik Kapisthalam and Air Marshal Brijesh Jayal contend), it is unlikely that Air India’s commercial deal is intended to placate America if and when India buys French Mirages for its air force. But if the Indian government did plan it this way, the move is nothing short of a masterstroke.
Related Link: Bill Rice discusses this on Dawn’s Early Light