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Unidentified senior Indian government official confesses that fears of US backlash behind Air India's Boeing order – time for Indian Government to come out with truth and correct the situation
It was fear of American backlash and not objective proposal or bid evaluation process that influenced Air India’s decision to buy $6 Billion worth Aircrafts from Boeing.
Fears of a US protectionist backlash were behind state-owned Air India's controversial decision to favor Boeing over Airbus for an almost 7 bln usd upgrade of its fleet, Financial Times quoted an unidentified senior Indian government official as saying.
The official told the paper that the US has been "grousing" that while Indian IT services exports had surged, most of India's manufacturing imports continued to come from Asia.
Washington has repeatedly called on New Delhi to ensure a "level playing field" for American industry. India's trade surplus with the US has more than trebled over the past decade, with its exports to the US reaching 15.6 bln usd, compared with imports from the US of only 6.1 bln.
"The US never likes this kind of trade imbalance to last for very long and expects us to do something about it or else they will start flexing their muscles. The problem is not that we are being protectionist but that US industry is uncompetitive," the official was quoted as saying.
"We would want to buy US defense equipment but there is a longstanding feeling that the US is not a reliable supplier because of the history of sanctions.
"This means that the one thing we can buy from them is aircraft. Ultimately there was a political difference between the two offers."
The Indian official's admission contrasts with public statements by Praful Patel, India's civil aviation minister, who last week said Air India's decision had not been based on geopolitical considerations and denied that his ministry had influenced the airline's board, the newspaper noted.
Airbus, however, has called for an inquiry into the Air India order, which is a significant coup for Boeing in its efforts to regain leadership in the commercial aerospace industry from its European rival.
"There is an obligation on state-owned companies to conduct major transactions in a fair, transparent way. We feel that this has not happened," Airbus spokesman David Velupillai was quoted as saying.
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