New Delhi, January 30, 2006 (IANS)

American defence major Lockheed Martin, in the race to sell 126 combat jets to India, Monday said the status of India-US diplomatic ties would influence its plans to supply military hardware to the country.

"Governmental relations in the national security arena have an impact on our ability to do business," said Robert Trice, Lockheed Martin's senior vice president for business development.

"We in the (US) industry follow the lead of our government. Everything we do has to have the full support of the US administration and Congress," he told a news conference here.

Lockheed Martin's F-16 fighter is one of five jets currently being considered by the Indian Air Force (IAF) for its plan to acquire 126 jets as part of its modernisation programme. Boeing is also in the race with its F-18 jet.

Trice is in India as part of the Lockheed Martin delegation that will attend the Defexpo 2006 arms fair here. Defence majors from the US will have the largest presence at the four-day event.

In the past, India has been reluctant to source defence hardware from the US in view of that country's complicated procedures for arms sales and its sanction regimes that have resulted in spares being withheld in the past.

Asked if any possible deal between India and Lockheed Martin would be vulnerable to such concerns, Trice said: "Anything can happen."

But he hastened to add: "We would not be here if we were not hopeful of establishing a long-term relationship."

The Indian government is expected to announce soon its formal "request for proposals" for the 126-jet deal. Besides the US-made jets, other aircraft being considered are Sweden's Gripen, Russia's MiG-29 and France's Mirage 2000.

The US government has thrown its weight behind the pitch made by Lockheed Martin and Boeing but some Indian experts have cautioned against any major arms deals with US firms, especially in light of complexities being encountered with the India-US civil nuclear deal of 2005.

Trice, however, noted that the US-India Business Council was lobbying with Indian and American politicians to convince them about the long-term benefits of bilateral ties in economics and defence.

As all arms contracts worth over Rs.6 billion ($136 million) are governed by regulations that require foreign firms to source components worth 30 percent of the total value of the deal from India, Trice said Lockheed Martin intended to forge "technical collaborations" with Indian partners if it bagged the 126-jet order.

"In most markets, we are not interested in having direct ownership (of assets) or in forming joint ventures... We will transfer as much technology as the US government is comfortable with to create as many long-term jobs as possible," he said.