Defence deals on Sarkozy's India itinerary

French President Nicolas Sarkozy arrives in India on Friday to shore up strategic ties, but also to regain lost ground in the lucrative race to supply the Asian giant with arms.

Sarkozy will watch the Republic Day parade in New Delhi on Saturday and hold talks with Prime Minister Manmohan Singh - with experts in India saying he will use such meetings to mend fences.

France, which had been the second largest major arms supplier to India after Russia, with sales touching nearly four billion euros (5.8 billion dollars) in 2005, has now been overtaken by Israel.

New Delhi is due to announce during the visit that France will be the sole bidder for a contract worth up to 1.5 billion euros to upgrade its Mirage fighters.

"We are expecting an announcement from India on Friday that they will soon launch a tender reserved for French companies," said Francois Dupont, India director for French defence firm Thales.

The Indian Air Force has 51 Mirage-2000 warplanes, made by Dassault Aviation with electronics from Thales, which need a major upgrade. But the deal is not likely to be signed before the end of the year.

France lost out to the British on a 2004 contract worth 1.4 billion dollars to supply 66 trainer jets to India, the biggest weapons buyer among emerging nations, which is set to spend 30 billion dollars between 2007 and 2012.

"What really has miffed France is the scrapping of the helicopter deal," said Kapil Kak, director of the Centre for Air Power Studies, a private think tank.

Last month, India cancelled a 600-million-dollar deal to buy 197 military helicopters from the European Aeronautic Defence and Space Company (EADS) unit Eurocopter.

The defence ministry has not said publicly why the deal was pulled, but senior defence sources have alleged that Eurocopter used a local go-between, despite an Indian ban on the use of middlemen in such deals.

The signing of that deal was supposed to be one of the highlights of Sarkozy's visit.

Wednesday, AFP