Indian jet competition shows emerging markets importance In Free Market Global Order! No country immune to euro crisis, says Christine Lagarde!
India is made Free Hunting Ground for International arms dealer as the Zionist Brahaminical Hegemony Militarises the STATE to accomplish the agenda of Mass Destruction and Ethnic cleansing of the Excluded Mulnivasi Bahujan!
India is buying 126 French-made combat aircraft in a massive $11 billion deal that will increase the might of the world's fourth largest air force with the first exported Rafale jets, officials said Tuesday.
First, the Americans, Russians and Swedes were ejected out of the hotly-contested race. And now, the Europeans too have been shot down in the dogfight, leaving only the French flying high in the Indian skies. After an exhaustive technical and commercial evaluation spread over five long years, India on Tuesday selected French jet Rafale over theEurofighter Typhoon for the gigantic almost $20 billion MMRCA ( medium multi-role combat aircraft) programme to supply 126 fighters to IAF - the largest such "open-tender" military aviation deal in the world. It will take another four to five months for the contract to be inked after the final round of commercial negotiations between the defence ministry and French aviation major Dassault, and the requisite final nod from the Cabinet Committee on Security. Indian jet competition shows emerging markets importance In Free Market Global Order! Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain on Friday, indicating there was a 1-in-2 chance of further cuts in the next two years. International Monetary Fund Managing Director Christine Lagarde said no economy is "immune" from the European sovereign debt crisis. "It's a crisis that could have spillover effects around the world," she said on Saturday at the World Economic Forum in Davos, Switzerland.
David Cameron, UK prime minister, has vowed to "encourage" India to reconsider its decision to buy France's Dassault jet fighter instead of Eurofighter's Typhoon, in which BAE Systems, the UK defence contractor, has a major stake. On the other hand,The German government regrets India's decision to pick France's Dassault Aviation over Eurofighter as the preferred bidder for a war plane contract, a spokesman said on Wednesday, adding, however, that no deal had yet been signed. "The German government notes the preliminary decision made by the Indian government," German government spokesman Steffen Seibert said at a regular news conference. "The German government regrets that the offer made by the Eurofighter consortium has, for now, not been accepted," he added. Asked why he used the term "for now", he said experience showed that pursuing exclusive talks was no guarantee of a sale and contracts sometimes ended up going to a different bidder. Rafale, made by Dassault, emerged on Tuesday as preferred bidder in the contest to supply India with 126 warplanes in what will be a $15 billion deal.
Its competitor, the Eurofighter Typhoon, is developed by a consortium comprising the German and Spanish branches of EADS , Britain's BAE Systems and Italy's Finmeccanica. British Prime Minister David Cameron said on Wednesday that India's decision to choose France's Dassault Aviationover Eurofighter as preferred bidder for a $15 billion war plane contract was disappointing and he would urge India to reconsider. On the other hand,France is confident that it can sign and seal a firm USD 12 billion deal to supply India with 126 Rafale fighter jets "within six to nine months", government spokeswoman Valerie Pecresse said today. The Rafale, a modern multi-role jet built by Dassault Aviation, has been selected by India as its preferred next generation interceptor, but details of the immense contract remain to be ironed out. "It needs to be finalised, but the French offer is the most competitive and that has been recognised by our partners," Pecresse said, after President Nicolas Sarkozy hailed the deal at a cabinet meeting. India announced yesterday it had selected the French firm Dassault over the Eurofighter consortium for "exclusive negotiations" as the preferred bidder in a contract estimated to be worth USD 12 billion. If concluded, the contract would mark the first time the jet had found an export partner, despite being in service with the French military since 1998 and having proved itself in several conflicts.
"Of course I will do everything I can, as I have already, to encourage the Indians to look at Typhoon (Eurofighter) because I think it is such a good aircraft," Cameron told parliament. "The decision is obviously disappointing but it is about who the Indians have assessed as making the lowest bid and therefore asked to enter into further negotiations. They have not yet awarded the contract," he added. He said he did not expect any job losses in Britain as a result of the decision and said "it doesn't rule out Typhoon for India." "We must go on making the case. This (Eurofighter) is a superb aircraft with far better capabilities than Rafale and we will try and encourage the Indians to take that view," he added.
Rafale, made by Dassault, emerged on Tuesday as preferred bidder in the contest to supply India with 126 warplanes. While exclusive talks are not a guarantee of sale, they deal a probable knockout blow to Rafale's chief rival in India, the Eurofighter Typhoon, a fighter plane developed by a consortium of four European aviation companies --the German and Spanish branches of EADS, Britain's BAE Systems and Italy's Finmeccanica. Cameron's spokesman said Britain would look very carefully at why India took the decision to make Dassault the preferred bidder. "We will want to learn from that," he told reporters. Talks between France and India over the fighter jet sale should be wrapped up within six to nine months, French government spokeswoman Valerie Pecresse said on Wednesday.
The following statement was released by the rating agency Fitch Ratings: Fitch Ratings says that the competition to supplyfighter jets to India, where the Indian Ministry of Defence announced on 31 January 2012 that it will enter exclusive negotiations with Dassault to purchase 126 Rafale jets in a deal that may be worth up to $20bn to the manufacturer over the life of the contract, demonstrates the growing importance ofemerging markets to the defence industry in developed markets at a time when their domestic revenue base is under pressure as a result of widespread fiscal constraints. "The Indian competition is one of the biggest defence deals in recent years, but it is likely to be only one of many as far as defence procurement by emerging market countries in the coming two years or so is concerned," says Tom Chruszcz, Director in Fitch's Industrials team. "In the fighter jet segment alone, up to a further 340 fighters could be ordered by emerging markets before the end of 2014 in what may prove to be boon for western defence companies suffering from weaker local demand."
Fitch notes that of the new fighter jet orders which are expected to be announced in the coming two years, the majority of these are likely to be in emerging markets. The most significant include Brazil, South Korea, the UAE, Qatar and Oman, which together could order up to 300 aircraft. Other, smaller, orders are also expected from Malaysia, Bangladesh and Bulgaria, among others. Conversely, few large orders in the short term are expected from developed countries, most of which are focusing on reducing their defence expenditure as part of wider efforts to rein in budget deficits. Fitch notes that the robust outlook for emerging market demand is not limited to fighter jets, but evident across the wider defence sector also, with big orders expected in the defence electronics segment, among others, in the short term. Nevertheless, the fighter jet segment demonstrates most acutely the recent shift in demand from traditional western markets to emerging countries, demand which is driven as much by the increased financial capacity of certain emerging countries as by modernisation requirements.
The strong growth in emerging market demand for defence equipment is a welcome respite to western military manufacturers who are increasingly seeing their revenue under pressure from cuts to defence spending in their indigenous markets. For example, in 2011, Fitch estimates that defence spending in Western Europe declined by approximately 4% - 5% from 2010 levels and may likely decline further in 2012. Given that it is unlikely that defence spending will see a reversal of recent trends, Fitch believes that in the medium term, the reliance on emerging markets for the defence sector will continue to grow. Nevertheless, for numerous reasons including political factors, pricing policies, product suitability as well as contractors existing level of involvement in a certain country, it remains uncertain which western defence manufacturers stand to benefit the most from this growth.
Dassault Aviation SA (AM), seeking its first export order for Rafale fighters, will begin exclusive negotiations to supply 126 jets to India after being selected as the lowest bidder. The French company and India's defense ministry will begin talks within 15 days, an Indian government official told reporters in New Delhi yesterday. Negotiations will probably extend beyond the March 31 end of India's fiscal year. Dassault surged the most in 22 years in Paris trading yesterday as it nears a deal valued at $11 billion. A lack of exports had led French Defense Minister Gerard Longuet to suggest the government could stop funding the Rafale, which has been used by the nation's military for more than a decade.
"It's great news for Dassault, it really firms things up for them," saidYan Derocles, an analyst at Paris-based Oddo Securities. "It would be their first export contract, and a very significant one at that, and it would likely have a booster effect on other negotiations now under way." India shortlisted the Rafale and Eurofighter Typhoon in April, when it rejected bids from U.S. manufacturers Lockheed Martin Corp. (LMT)and Boeing Co. (BA), as well as Saab AB (SAABB) and OAO United Aircraft Corp. The country is buying the fighters to replace an aging fleet of Russian MiG-21s and Dassault Mirage 2000s.
"The Rafale was selected thanks to its cost effectiveness over the lifetime of the plane," French President Nicolas Sarkozy said in an e-mailed statement. "The announcement comes after a very high-level, equitable and transparent competition."
Dassault Jumps
Dassault, based in Paris, jumped 18 percent to 725 euros. A majority of the stock is held by the Dassault family, while European Aeronautic, Defence & Space Co., a co-producer of the competing Typhoon, owns 46 percent. Safran SA (SAF), which supplies the Rafale's engines, rose 3.6 percent.
Indian law requires the government to negotiate a contract with the lowest bidder. The only way it can reconsider the tender is if Dassault says it can't fulfill the contract, said Mrinal Suman, an arms-procurement adviser for the Confederation of India Industry. Europe and U.S. defense contractors have stepped up their focus on Asia and emerging markets where military spending is rising because of economic growth. India tripled its military budget in a decade to $32 billion in the year ended March 31, 2011 to compete with a near-quadrupling of spending by neighbor China. In December, Japan awarded a contract to Lockheed Martin to supply 42 F-35 fighter jets. By contrast, governments in Europe and the U.S. are paring defense spending as they tackle deficits. That has, for instance, caused Eurofighter to slow production of the Typhoon as it awaits new orders.
Rising Cost
The Indian contract was valued at 420 billion rupees ($8.5 billion) in a 2007 tender. The cost may have risen to as much as $11 billion, partly because of delays in picking a winner, Suman said. India's state-owned Hindustan Aeronautics Ltd. (HNAL) will probably be the production partner for the planes, according to Craig Caffrey, a London-based analyst at IHS Jane's DS Forecast, which advises defense suppliers. "Dassault Aviation and its partners reiterate their commitment to meet the operational requirements of the Indian Air Force and underline their pride in contributing to India's defense for over half a century," the French planemaker said in an e-mailed statement.
France Paying
France so far had been left to pay the full production costs for the Rafale after the fighter was rejected by countries including Singapore, South Korea, Morocco and Switzerland. Longuet told LCP television in a December interview that the Rafale was more expensive than U.S. models and that "the production line will be stopped" without exports. He didn't give a timeframe. French Prime Minister Francois Fillon said later the same month that production will continue.
Dassault, which has delivered at least 100 of 180 fighters ordered by France, had lost a contest to Saab's Gripen in Switzerland. It has since sought to get back into the competition with a new offer that includes fewer and modified Rafale jets. The company was also close to winning orders from Brazil and the United Arab Emirates before both governments began fresh negotiations. It remains in these contests. "We've seen other deals advance to this stage with Rafale only to get broken, like Brazil and U.A.E.," said Richard Aboulafia, vice president at the Teal Group, a Fairfax, Virginia-based consulting company. "I'm not sure I'd take this to the bank until we see a firm contract." Eurofighter said it was "disappointed" by the choice and respects the decision. The group includes BAE Systems Plc (BA/), EADS (EAD), and Italy's Finmeccanica SpA. (FNC)
Dassault's relations with India date back 60 years. India was the very first export customer for Dassault, ordering 71 Ouragans in June 1953, and India has purchased most Dassault models sold since. India replaced the Ouragans with Dassault's Mystere IV A in 1957, procuring 104 in 1957 and using them in 1961 for air strikes against the Portuguese colony of Daman.
Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain on Friday, indicating there was a 1-in-2 chance of further cuts in the next two years. In a statement, the ratings agency said the affected countries were vulnerable in the near-term to monetary and financial shocks. "Consequently, these sovereigns do not, in Fitch's view, accrue the full benefits of the euro's reserve currency status," it said. Fitch cut Italy's rating to A-minus from A-plus; Spain to A from AA-minus; Belgium to AA from AA-plus; Slovenia to A from AA-minus and Cyprus to BBB-minus from BBB, leaving the small island nation just one notch above junk status.
Ireland's rating of BBB-plus was affirmed. All of the ratings were given negative outlooks. Fitch said it had weighed up a worsening economic outlook in much of the euro zone against the European Central Bank's December move to flood the banking sector with cheap three-year money and austerity efforts by governments to curb their debts. "Overall, today's rating actions balance the marked deterioration in the economic outlook with both the substantive policy initiatives at the national level to address macro-financial and fiscal imbalances, and the initial success of the ECB's three-year Long-Term Refinancing Operation in easing near-term sovereign and bank funding pressures," Fitch said.
Two weeks ago, Standard & Poor's downgraded the credit ratings of nine euro zone countries, stripping France and Austria of their coveted triple-A status but not EU paymaster Germany, and pushing struggling Portugal into junk territory. With nearly half a trillion euros of ECB liquidity coursing through the financial system, some of which has apparently gone into euro zone government bonds, and with hopes of a deal to write down a slab of Greece's mountainous debt, even that sweeping ratings action had little market impact.
The euro briefly pared gains against the dollar after Fitch cut the five euro zone sovereigns but soon jumped to a session high of $1.3208, according to Reuters data, its highest since Dec. 13. Italy is widely seen as the tipping point for the euro zone. If it slid towards default, the whole currency project would be threatened. Lagarde said governments should also boost their bailout funds. "It is critical that the euro-zone members actually develop a clear, simple firewall that can limit the contagion," she said. She also said some countries that use the euro have the flexibility to boost growth to help shore up the ailing eurozone economy, which is widely-expected to sink back into recession. Lagarde said the 17 nations that use the euro should not undertake dramatic spending cuts to reduce debts at the same pace or to the same degree.
"Some countries have to go full-speed ahead to do this fiscal consolidation, but other countries have space and room," said Lagarde. Though conceding that there weren't many of them, Lagarde said it was important that those that have the headroom should explore how they can boost growth. She carefully avoided naming any countries, but likely had in mind Germany, Europe's largest economy and a major world exporter. She didn't specify how to boost growth either or how one eurozone country could help others grow. In addition, Lagarde said members of the eurozone should continue the drive to tie their economies closer together over the months and years ahead.
Lagarde also repeated her belief that the Washington, D.C.-based fund needs more resources if it is to help restore stability in the global economy. The IMF has said it needs around $500 billion more in financial firepower, a request that has met with mixed response and notably resistance from the US. Britain's finance minister George Osborne said there was "a case" for boosting the IMF's resources. Osborne said the eurozone had two things to do over the coming weeks to get a handle on its crisis: Greece's debt-reduction talks with private creditors had to be concluded soon; while the creation of a proper "firewall" of measures aimed at stopping the crisis from spreading was "key to unlocking further confidence".
Europe's debt crises are a major concern of the business and political leaders gathered for the annual, invitation-only event at Davos. Meanwhile, ratings agency Fitch has downgraded its sovereign credit ratings of Belgium, Cyprus, Italy, Spain and Slovenia. Ratings of Italy and Spain, two Eurozone economic heavyweights, were slashed by two notches. The countries now have the ratings of A- and A, respectively.
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