The Indian government is threatening to rule out BAE Systems for a $1.6bn (£1bn) contract to supply Hawk advanced jet trainers to the Indian Air Force, according to a report by a French news agency.
Indian defence ministry sources were quoted as saying the threat followed Britain’s refusal to return two Sea Harrier naval fighters sent to the UK for repairs just before India performed nuclear tests in May 1998.
`BAE Systems has been told that this issue has to be solved first before any negotiations can take place and also that the supply of the aircraft would have to be assured,’ a source said.
The UK allegedly stopped the Sea Harriers’ return after the US refused to provide spares for the fighters, citing sanctions against India. `Under such circumstances it may not be possible to do business with BAE,’ the source said.
If the deal for 66 training aircraft is cancelled, it could clear the way for BAE’s French rival Dassault’s Alpha Jet.
But the story was described as `completely untrue’ by BAE Systems. It said the Indian Navy had sent back two major components from Sea Harriers that had been in accidents.
`We have not had any complete Sea Harriers returned to us,’ BAE said. `The programme to repair the two components is progressing well. One component is already back in India and undergoing final assembly. The other is on schedule for delivery later this year.’
The UK Ministry of Defence also said there were no sanctions against India that were holding up business.
The Indian parliament’s defence select committee has said the Hawk has been selected as the preferred trainer, but this has not yet been confirmed to either BAE Systems or the MoD.
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