HAL-UAC deal: Message to the US and Russia

The HAL-UAC civilian aircraft deal is rich in optics, and good for Indian manufacturing

India’s move to work with a Russian state-run aviation major facing extensive Western sanctions to build a civilian commuter aircraft came almost a decade after Moscow first offered the complete production of the regional jet to New Delhi. The fact that an agreement was finally signed on the SJ-100 jet by India’s Hindustan Aeronautics Limited (HAL) with Russia’s United Aircraft Corporation (UAC) ahead of President Vladimir Putin’s visit for an annual summit with Prime Minister Narendra Modi is being seen as both a part of India’s balancing act and a message to the US and to Russia.

At a time when the US has intensified sanctions and punitive measures over the purchases of Russian energy, New Delhi has made it clear that it will not be bullied into making decisions that affect the country’s strategic autonomy. (ANI Photo)

At a time when the US has intensified sanctions and punitive measures over the purchases of Russian energy, New Delhi has made it clear that it will not be bullied into making decisions that affect the country’s strategic autonomy. To the Russian side, the agreement is the signal that India is willing to branch out into other critical sectors at a time when the sanctions may have forced the reduction of procurement of Russian energy.

The UAC, which was created by Putin by merging several of Russia’s main players in aviation, is no stranger to India’s aviation industry. It has played a key role in the licenced manufacture of the Sukhoi-30MKI combat jets that are currently among the Indian Air Force’s frontline assets. While the deal between HAL and UAC envisages the manufacture of the 100-seat regional jet for domestic consumers, India will have to be mindful of the potential impact of US, British and European Union sanctions against the Russian firm. The manufacture of the SJ-100 aircraft in India will be the first such project taken up by HAL since the late 1980s and could give a major boost to the firm’s prospects in the civil aviation sector. HAL has projected a need for 200 regional jets in India over a decade. Besides, the domestic manufacturing of such aircraft will be a shot in the arm for the country’s drive for self-reliance in critical sectors.

This deal, and others expected to be unveiled during Putin’s planned visit – there is talk of a follow-on order by India for more batteries of the S-400 Air defence systems – will help pre-empt any cooling off in New Delhi-Moscow ties over energy purchases. Washington should read the message here: Grandstanding on politics and delaying trade deals and technology transfers will only persuade India to explore other and more fruitful collaborations.