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Boeing and Lockheed Lock Sights on India

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We're coming down to the wire.

In India, the nation's air force has completed "evaluation" of the half-dozen fighter planes it's currently considering to update its aging, Soviet-era fleet. Topping the running are two jets manufactured by U.S. defense contractors: Boeing's (NYSE: BA  ) F/A 18, and Lockheed Martin's (NYSE: LMT  ) F-16.

Still, the competition is hot on their heels, as Russian Aircraft Corp continues to push the MiG-35 option, Saab (they're "Born from jets," dontcha know?) fields a Gripen, Eurofighter a Typhoon, and Dassault Aviation re-enters the competition with its Rafale fighter jet.

So why do I say that Boeing and Lockheed top this competition? They've already racked up a win apiece in India. Two years ago, Lockheed broke into the subcontinental market with a contract to sell the Indians a half-dozen C130-J military transports -- a huge, pioneering win for the contractor and its subcontractor Honeywell (NYSE: HON  ) . Earlier this year, Boeing squeezed past Lockheed's foot-in-the-door (and invited partners Northrop Grumman (NYSE: NOC  ) and Raytheon (NYSE: RTN  ) to come with) as it landed a contract twice as large for the sale of its new P-8A Poseidon sub-hunter.

Meanwhile, the competition is doing a passable imitation of the gang that couldn't shoot straight.Russia may have shot itself in the foot by trying to up the price on an separate existing deal to sell India a couple hundred Sukhois (bad form, tovarich). And Dassault nearly got itself booted from the competition entirely for "noncompliance with some operational requirements".

Eurofighter lost a similar competition to Lockheed by default in Norway back in 2007; later, Lockheed beat out Saab, the last man standing. So while I concede that this deal is hardly "in the bag" for the U.S. contestants, I do believe the odds are on the American companies' side.

Sky-high stakes
But this story gets even better. In addition to the $10 billion that India is reportedly ready to pay for the 126 fighters on order, the country is also shopping for another $2 billion worth of military helicopters: 22 combat choppers, and 15 transports.

Here, competition comes from a different set of foreign rivals. But I do suspect that if the Indians like what they see in U.S. fighter jets, they'll likely go with the "known quantity" and choose a Boeing Chinook or United Technologies' (NYSE: UTX  ) Sikorsky chopper for the transport, and either a Boeing Apache or Textron (NYSE: TXT  ) Bell for the attack variant. However, in fairness, bids haven't been finalized for the helicopter contracts and there's still some political wrangling that may prevent American firms from bidding.

Foolish takeaway
Seems to me that India's saying: Come on over, America. The water's fine. Defense investors should heed the call.

Looking for other high-tech defense prospects for your portfolio? Check out Motley Fool Rule Breakers, where we're looking into options in everything from flying model airplanes, to bomb-proof trucks, to bulletproof soldiers. 30-day free trials are available on demand.

Fool contributor Rich Smith owns shares of Boeing. The Motley Fool's disclosure policy dominates land, air, and sea.

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