London/New Delhi, Feb. 1: Rarely before have India's shopping preferences stirred such hand-wringing in Britain.
UK Prime Minister David Cameron today expressed "disappointment" at the possibility of losing the deal from the Indian Air Force which has zeroed in on the French Rafale for placing the world's biggest order for fighter planes.
Cameron, who had spared no effort to lobby hard for the job-generating order in the middle of a downturn, appeared to be keeping his hopes alive as the French deal has not yet been inked.
"Of course, I will do everything I can ' as I have already ' to encourage the Indians to look at Typhoon, because I think it is such a good aircraft…. They have not yet awarded the contract," Cameron told MPs today. Britain's BAE has a 33 per cent stake in the four-nation consortium building the Eurofighter Typhoon.
During Prime Minister's Questions in the Commons, Cameron added that the Typhoon was a "superb aircraft, far better than Rafale".
Prime Minister Manmohan Singh is expected in London "within weeks". So, the two Prime Ministers will have a great deal to discuss ' there is the feeling in London that the UK is putting more into its relationship with India than the other way round. British pride ' or at least British tabloid pride ' is hurt. UK's Mail Online noted: "Well that's gratitude! We give India a �1bn in aid, THEY snub the UK and give France a �13bn jet contract."
The IAF decision is a personal embarrassment for Cameron, who made growing trade with India a key foreign policy issue. He chose India for his first prominent foreign tour as Prime Minister in July 2010, taking six cabinet ministers and 39 business leaders, including BAE representatives.
Although Cameron said that "we do not expect any job losses stemming from this decision", British ministers had said the programme could help over 200 local companies in the supply chain while supporting up to 5,000 jobs.
One silver-lining is that EADS, the Eurofighter consortium, holds over 46 per cent stake in Rafale-maker Dassault Aviation. If Dassault does well, the consortium also gets to share the profit pie.
The French bid was cheaper but analysts said political backing had been the key to victory. French President Nicolas Sarkozy described the decision as a vote of confidence in "the entire French economy", just 48 hours after he declared that Britain had no manufacturing sector to speak of.
Barry Gardiner, Labour MP and chairperson of Labour Friends of India, used language less temperate than Cameron's. "I have today called for major reforms to UK Trade and Investment (UKTI), after the UK-based BAE Systems lost the contract," he said. "The loss of the Eurofighter contracts is another major blow to British industry, and comes at the worst possible time."
"Today I have called for radical reform of the Indian high commission's role in promoting UK-India trade…. India House has now been without a high commissioner for seven months, something that would be inconceivable in Beijing or Washington. This demonstrates that the ministry for external affairs in Delhi no longer sees the UK as strategically vital to India's interests," said Gardiner.
J. Bhagwati, India's ambassador in Brussels, has been appointed high commissioner to the UK and is expected to take up the new job this month.
"Suffice it to say that the views and perspectives of the high commission are rather different from those expressed by Mr. Gardiner," responded a high commission spokesperson.
Reports from the other Typhoon consortium members ' Italy, Spain and Germany ' suggested they have not given up. Germany's Spiegel Online said the "deal could ultimately collapse ' (for) in the past, all other talks to sell Dassault's Rafale aircraft abroad have failed."
If the scramble turns dirty, it won't be long before mutterings of bribes and honey traps surface.
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