Yorkshire misses out as defence giants land India jet deal

The 57 jets will be built under licence in Bangalore by Indian state-run firm Hindustan Aeronautics Ltd (HAL) rather than at BAE's plant at Brough in East Yorkshire, traditionally known as the Home of the Hawk.

Prime Minister David Cameron unveiled the deal in India yesterday as part of a major trade mission.

"This agreement will bring significant economic benefits to both our countries," he said. "It is evidence of our new, commercial foreign policy in action."

The Government also revealed it will allow the export of British civil nuclear technology and expertise to India for the first time by granting licences.

The move has traditionally been opposed by the Foreign Office and the Ministry of Defence because India is not a signatory of the Nuclear Non-Proliferation Treaty.

Mr Cameron also stoked tensions between Britain and Pakistan, saying that it should not be allowed "to promote the export of terror" in the world. His comment follows the leak of confidential "war logs" alleging Pakistan's intelligence agency had been secretly helping the Taliban.

The Hawk contract – worth about 500m to BAE Systems and 200m to Rolls-Royce – will support about 200 jobs in the UK and follows a previous agreement to supply 66 jets in 2004.

Of the earlier deal, 24 Hawks were made in Brough, with the remaining 42 built by HAL in India. BAE confirmed this will be the first entire Hawk contract to be built overseas under licence, but added previous contracts have contained heavy licensed elements.

"There are no direct parallels with this contract," said a BAE spokesman.

"There's a great wealth of skill and expertise at Brough which can be called upon to support not only the Hawk but other aircraft as well."

BAE said Brough, which employs about 1,500 staff, will benefit from work such as engineering, purchasing, operations and support services.

The site still has other Hawk work and is hopeful of winning more.

The aircraft – 40 for the air force and 17 for the navy – extend the existing relationship with the UK firms for a further six years.

Rolls-Royce has worked with the Indian firm since 1956 and is supplying its Adour engines for the jets. BAE also sells the Hawk to customers including Australia, Canada, South Africa and the Royal Air Force.

Hull West and Hessle MP Alan Johnson said the BAE contract is "still very important" and a foreign manufacturing deal had always been expected.

"It's just the nature of the defence industry now," he said. "There's no alternative to this. Say that we reject this contract and insist that they build them in Brough – if we did that, it's goodbye to a BAE contract."

Ian Gent, convenor for staff unions at Brough, said the foreign

contract was no surprise to staff.

"The most we would expect is some logistics and procurement stuff and probably some in-country stuff," said Mr Gent. "This was always a departure for us. We have always built them at Brough but it's for them to be able to build for their own fleets."

He added the Brough plant has shifted away from a reliance on Hawk work in recent years.

"We used to be about 80 per cent on Hawk. Now a lot of our work is around Typhoon and Nimrods. But it's still welcome news."