Cameron seeks Indian military contracts

David Cameron will seek next week to sell Hawk jets and design plans for aircraft carriers to India, as he leads a clutch of cabinet ministers on a trade mission to the subcontinent.

Defence exports will be one of the most concrete and contentious manifestations of the “special partnership” Mr Cameron wants to forge with a rising power that he feels Britain has neglected for too long.

The prime minister is to travel with seven cabinet ministers – including the foreign secretary, chancellor and business secretary – in an effort to revitalise ties with New Delhi and to generate business in the insurance, financial services and technology sectors.

But the most immediate big deals may come in defence. BAE hopes to sign a deal worth up to £500m to supply about 60 more Hawk trainer jets, building on an established partnership with Hindustan Aeronautics Ltd (HAL), the state-run defence company.

India ordered 66 Hawk jets from BAE in 2004 at a £1bn cost. All the aircraft in the follow-up deal are likely to be built by HAL.

The model for technology transfer and joint manufacturing could also be extended to UK aircraft carriers. Senior defence figures believe the Indians may be interested in buying designs or specific technologies, in a deal that would advance the country’s shipbuilding capacity.

Other potential defence equipment offers on the British stall include the Type-26 frigate, the “future surface combatant”, which BAE Systems would seek to sell in “modular form” once its design is complete.

The UK company has been seeking shipbuilding opportunities as India’s navy has sought to expand its fleet from its own dockyards rather than buying warships from other navies.

BAE already has an armoured vehicle and artillery joint venture with Mahindra & Mahindra, the truck maker.

Mr Cameron’s team will also seek to press British interests in India’s $11bn (£7.1bn), 126-aircraft fighter procurement contest. Six manufacturers are in the running, with EADS, the consortium that includes BAE Systems, offering the Eurofighter Typhoon jet.

While the Indian government is keen to develop its defence industrial base, it continues to source about 70 per cent of its equipment from foreign suppliers.