NEW DELHI: The Indian government’s penchant for canceling or withdrawingtenders for defense equipment at the last minute is likely to hurt investorconfidence in the country, experts said on Sunday.New Delhi has called off a $9 billion deal to co-develop with Russia anext-generation fighter aircraft, after the state-owned Defense Researchand Development Organization (DRDO) said it would do the job in-house,Indian media reported this week.Under the deal, a significant amount of the research would have beencarried out in India. Russia had agreed to tailor the aircraft to Indianneeds, and was to hand over all the technology, the Economic Times reported.India is the world’s largest importer of defense equipment, and imports atleast 90 percent of its equipment, including parts for assembly.The government of Prime Minister Narendra Modi wants the country todecrease its reliance on foreign firms, reduce its import bill andmanufacture equipment in-house.But India lacks much of the high-end technology needed for such equipment,which is why deals where foreign partners agree to share technology areuseful for its long-term plans, experts say.When such deals are canceled, “it greatly reduces confidence in India,”said Saurabh Joshi, editor of StratPost Media Pvt Ltd., a defense newswebsite.“We can’t willy-nilly… accept arguments that a particular equipment can bedeveloped and produced indigenously before such tenders are withdrawn,” headded.“There should be an adequate test to develop and produce indigenously.Otherwise, we’re simply postponing an acquisition process by 10 to 15years, and it’s the armed forces that have to go without critical equipmentuntil then.”Experts say one reason for the government canceling orders could be a lackof funds. The Russian deal is not the only one to be jettisoned recently.New Delhi scrapped a $500 million deal for Israel’s Spike Anti-Tank GuidedMissile. Israel had agreed to transfer the technology to India, and had setup a factory in a venture with an Indian company. The reason given for thecancellation was the same: To develop the missiles indigenously.A tender was also withdrawn for short-range surface-to-air missiles, withIsrael’s SPYDER system having been the front-runner, experts said.On average, it takes a tender at least six years to go through the varioussteps before the final purchase order can be placed.Any company that loses a bid has to account for that time and investment toits head office and its board, Joshi said.