IAF forced out of Indian fighter jet bid
Yaakov Katz , THE JERUSALEM POST Jul. 5, 2009
www.jpost.com/servlet/Satellite?cid=1246443717576&pagename=JPArticle%2FShowFull

Under pressure from the Pentagon, Israel Aerospace Industries (IAI) has been
forced to back out of a joint partnership with a Swedish aerospace company
to compete in a multi-billion dollar tender to sell new multi-role fighter
jets to the Indian Air Force.

The deal, estimated at a whopping $12 billion for over 120 new aircraft, is
being fought over by Lockheed Martin's F-16, Boeing's F-18/Hornet, Russia's
MiG-35 and BAE's Eurofighter. IAI was asked by Saab, manufacturer of the
Gripen, to jointly develop an advanced model which would compete for the
deal.

The Defense Ministry ordered IAI to back out of the deal after the Pentagon
expressed concern that American technology, used by Israel, would be
integrated into the Gripen offered to the Indians.

"The stated concern was that Western technology in Israeli hands would make
its way to the Indians," one Israeli official said.

What was strange with the American request was that Boeing and Lockheed
Martin - the two largest US defense contractors - are also competing for the
Indian deal. For this reason, Israeli officials said it was more likely that
the Americans were concerned that if IAI competed for the deal with Saab, it
would force the American companies to lower their prices.

A multi-role fighter, the Gripen is in service in Sweden, the Czech
Republic, Hungary and South Africa. IAI was supposed to provide the
electronic systems - radar, communications and electronic-warfare - for the
plane.

This is not the first time that an Israeli company has been forced out of a
deal due to concerns that competing with American companies would endanger
Israeli-US relations.

Last summer, the MoD ordered Israel Military Industries (IMI) to back down
from submitting a bid for a half-a-billion dollar deal to develop and
manufacture a new tank for the Turkish Armed Forces.

At the time, Turkey had informed the MoD of its interest in developing a new
tank and asked if IMI would want to submit a bid. SIBAT - the MOD's Foreign
Defense Assistance and Defense Export Organization - decided not to submit
an Israeli offer so not to compete with the Americans and endanger
Israeli-US defense relations.