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Defense Secretary James Mattis and Secretary of State Michael Pompeo travel to New Delhi to meet with their counterparts on Thursday, and several issues related to the defense of India are at stake as sanctions are emerging.
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The talks will include joint military exercises, equipment sales and economic ties, although sources told Bloomberg that the negotiations would focus more on strategic issues than on individual arms deals.
Here are three key questions to watch out for:
Lockheed looking for a defense pact in India
Tuesday, Lockheed Martin (LMT) announced an agreement with Tata Advanced Systems to build all F-16 wings at a plant in Hyderabad from the end of 2020.
Lockheed, with Boeing (BA) and Swedish company Saab are competing for a $ 15 billion hunting contract with India as New Delhi plans to modernize its aging fighters.
Lockheed had previously stated that it would move the entire F-16 production chain to India to secure the deal, as India favors technology transfers and local partnerships in defense deals.
However, the production of the F-16 wing in motion will occur no matter who wins the coveted hunting deals. The F-16 is currently produced in South Carolina.
India could also be on the market for Boeing's additional UAVs, cargo planes and Boeing P-8 maritime patrol aircraft.
But do not expect bids to be formally announced at the meeting.
"India tends to refrain from announcing (individual offers) at summits," said Richard Rossow, Senior Advisor at CSIS.
The United States has announced its willingness to export advanced drone technology during Prime Minister Narendra Modi's visit to Washington last summer, but so far India has not agreed to buy, explained Rossow.
Lockheed shares have been down 0.3% on the stock market today. Boeing dropped 0.4%.
Russia's sanctions threaten India's defense
India could face penalties for buying the Russian S-400 air defense system under the Countering America's Adversaries Through Sanctions Act.
India has a long history of buying combat aircraft and other military equipment in Russia, and before that from the USSR.
In the United States, the purchase by India of a new advanced weapon, such as the S-400, and not just spare parts or replacement for the current Russian equipment.
On his way to India, Mattis told reporters that the S-400's problem would be "probably" raised by India, but said that he would not comment until after Having heard what his counterpart had to say.
Mattis and Pompeo will also meet Modi and National Security Advisor Ajit Devol.
"We do not take the relationship for granted, and we will strive to strengthen it," said Mattis about America's relationship with India.
"It's a constant relationship with honest, grounded discussions that we share as democracies, but it's ground that provides a solid foundation for our future relationship, a foundation that can take action without fear. "
Still, Rossow thinks that the S-400 question "will not go away with a single summit".
Turkey is also looking to buy the S-400 and the State Department is discussing the sale of Ankara RaytheonPatriot missile defense system (RTN) rather than facing penalties under the CAATSA.
It is unclear whether the United States would instead offer a system manufactured in the United States. But unlike Turkey, Rossow thinks that there is enough room in the act for India to get an exemption from the White House. Mattis has been a strong supporter of the CAATSA exemptions for national security.
"With Turkey, there is a lot of negativity about where (President Recep Tayyip) Erdogan is taking the nation," he said.
And the S-400 agreement could collapse before CAATSA becomes a problem. The contracts with India in defense matters were dropped near the finish line.
"India's internal process is quite slow," said Rossow. "Offers that seemed close collapsed on issues of price or technology transfer."
Oil penalties
In addition to sanctions imposed by Russia, US sanctions against Iran after Trump 's withdrawal from the nuclear pact constitute another obstacle to a rapprochement of relations between the United States and the United States. India.
India was the biggest buyer of Iranian crude in July. Sanctions against countries doing business with Iran could have a bigger impact on India than CAATSA.
"The Trump administration will be less interested in waivers when trying to connect to Iran," Mr Rossow said.
India is currently developing the port of Chabahar in Iran to provide aid to stabilize Afghanistan without passing through Pakistan, but the port would also boost trade with Iran.
India said it would commit up to $ 500 million to develop the port, but that it would need a waiver from the US government after that. Trump administration has left the Iranian nuclear deal, imposing new sanctions.
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