Britain gave India £1bn in aid to assist the alleviation of poverty. It seemed like a stupid (due to recession in their own country) but very generous move at that time. But after India chose France as its next lot of fighter jet producer, Britain got shocked and a whole lot of criticism broke out on India referring to their betrayal.
Apparently, India was expected to be grateful to Britain and give them the £13bn contract solely out of the gratitude for that aid.
It’s an open secret that Britain considered that aid as a tool to achieve India's financial gratitude. In another sense, it was one of their marketing strategies to win the order over France; which obviously is a failure.
Both Indian and France govt. turned out to be wiser than Britain when it comes to business. The fighter jets that Britain was offering (Typhoon) were much better than the same of France (Rafael). After realising this, cutting down their bid at the very last moment was the order winner for France.
Like all other business, arm trading is not only about the quality of the product but also about the competitive price. In this case, Britain failed to identify its customer’s requirements. Providing with a regular flow of financial aid did not satisfy any of the requirements from Indian govt as a customer for fighter jets. The requirements were a good price, a steady flow of spare parts and after sale services.
Talking about spare parts, Britain has a bad reputation in Indian Air Force due to their failure of providing spare parts for their fighter planes at the time of Kargil war. At that same time, France provided them with ample supply of spare parts for their fighter planes. As a result, the Indian Air Force considers France to be a more reliable supplier than Britain.
Britain should have considered its past failures on spare parts and focus on making strong promises to Indian govt. about their reliability and dependability rather than just expecting India to hand them the contract like a piece of cake. Rather than giving india an aid of £1bn, if they would have reduced the bid by a total £1bn then they could have had a better chance to win the bid.
Nothing political, just my own thoughts.