Thu, 07 Feb 2013 20:25:51 GMT | By Reuters

'India budget cuts not to affect Boeing contracts'

Boeing is in exclusive talks to sell 22 of its Apache combat helicopters and 15 Chinook heavy lift helicopters to India.


'India budget cuts not to affect Boeing contracts' (© Reuters)

BANGALORE - Boeing Co's (BA.N) contract talks with India for military helicopters will be unaffected by planned budget cuts, an executive said on Thursday, a day after the country's defense minister said spending on arms would be tightened.

India, the world's biggest arms importer in recent years as it looks to upgrade its mostly Soviet-era military hardware, is cutting defense spending as part of a wider push by New Delhi to rein in its fiscal deficit.

"There is nothing that will lead me to believe there will be any delays," said Dennis Swanson, vice president, international business development at Boeing's Defence, Space and Security Division.

"India is one of our biggest growth markets. We are certainly aware of (the budget cuts). We are not changing anything that we are doing," Swanson told Reuters in an interview on the sidelines of an air show in the Indian city of Bangalore.

Boeing is in exclusive talks to sell 22 of its Apache combat helicopters and 15 Chinook heavy lift helicopters to India. Swanson declined to comment on the deal value when asked by Reuters.

India agreed in 2011 to buy 10 C-17 military cargo planes from Boeing in a $4.1 billion deal, but overlooked the U.S. company in favor of France's Dassault Aviation (AVMD.PA) for a highly sought-after $10 billion fighter jet contract. "We do see additional opportunities for C-17s," Swanson added, without providing details.

The U.S. company's civil aviation division is in talks to sell its 737-MAX aircraft to Indian carriers Jet Airways (JET.NS), SpiceJet (SPJT.BO) and Air India AIN.UL, another executive told Reuters in a separate interview.

"737 has been the mainstay of domestic aviation in India ... All these airplanes will be replaced some day and the replacement for that is MAX," Dinesh Keskar, Boeing's vice-president for sales in Asia Pacific said. "We are in conversations with the airlines here."  State-run passenger carrier Air India was the world's fifth airline to take delivery of Boeing's Dreamliner jet, and has ordered 27 in total.

The manufacturer will address compensation issues over the grounded Dreamliners after the troubled aircraft take to the skies again, Keskar said.

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