India, US sign first military contract since tariff rift

India and the US on Friday inked a military contract — their first since trade- and tariff-related frictions strained ties a few months ago.

The Ministry of Defence signed the ‘letters of offer and acceptance’ with the US for sustainment support of the Indian Navy’s fleet of MH-60R helicopters. The deal is worth Rs 7,995 crore and comes just a week after the US Department of Defence cleared two separate sales worth $92.8 million (around Rs 816 crore) for India — specialised ‘Excalibur’ artillery ammunition used during Operation Sindoor and javelin anti-tank missiles. These two sales still require approval from the US Congress.

The latest contract covers sustainment for the MH-60R, a specialised submarine-hunting helicopter operated from ship decks and shore bases.

A sustainment programme is a comprehensive package that includes spares, support equipment, product support, training and technical assistance, repair and replenishment of components and establishment of intermediate-level component repair and periodic maintenance facilities in India.

Developing these facilities domestically will help build long-term capability and reduce dependence on the US Government, aligning with India’s vision of self-reliance, the Ministry of Defence said.

The programme will significantly enhance the operational availability and maintainability of the MH-60R fleet. India has procured 24 of these helicopters — produced by Lockheed Martin — for $2.6 billion, with deliveries beginning in 2011.

The agreement was concluded under the US Foreign Military Sales (FMS) programme and will enable the helicopters to operate from dispersed locations as well as naval ships, ensuring optimal performance. Defence Secretary Rajesh Kumar Singh was present at the signing.

This is the first military FMS deal since India-US relations soured in August, when the US imposed a 50 per cent tariff on Indian goods entering its market, including a 25 per cent punitive tariff linked to India’s purchase of Russian crude oil.