Bangalore: Saab AB is looking at India as a base for some manufacturing and is hoping that the country will relax the rule on foreign direct investment in defence so that it can better control and manage its intellectual property. In an interview ahead of aircraft expo Aero India 2011 that opens on Wednesday, Inderjit Sial, the head of the Indian arm of the company which is hoping to sell its combat aircraft JAS-39 Gripen to India, spoke to Mint. Edited excerpts.
What are the Saab AB ’s plans for India?
We are looking at Aero India to display the capabilities of our missile system, aircraft, radar, electronic warfare command and control system. All these are opportunities we are pursuing here. This is a good opportunity to showcase our capabilities to customers and Indian partners. We have fixed up a number of meetings with SMEs (small and medium enterprises) during the show; (these firms could be) part of our supply chain for all products in our portfolio, including aircraft, systems and subsystems. We are looking for partnerships on IT—the embedded software part—and we are also looking at component manufacturing, precision machining, and composites development.
Seeking partnerships: Inderjit Sial says Saab is discussing the possibility of forming joint ventures for various programmes with Indian firms.
Yours is one of six firms shortlisted by India for the purchase of medium multi-role combat aircraft (MMRCA). What do you expect from this year’s Aero India show?
It’s different this year. It has emerged as a larger platform to display our capabilities and also (an opportunity to) look for commercial interactions. Usually, there were only aircraft at such shows but this time we also have subsystems on display. We have, for the first time, brought missile systems, the RBS-170 next generation one. It is an air defence missile system which we have offered to India. We are going to display this primarily for all the three armed forces. In communication systems we are going to display the capabilities of the Carabus which is an anti-foliage radar and head-up display for the helicopters. On the civil aviation side we have brought civil aircraft, Saab 2000 and 340 to the show for the first time.
India is a booming civil aircraft market and things are also picking up on the defence side. What role do you see India playing in your company’s global operations?
We are looking at India as a manufacturing hub. We have tie-ups with public sector companies such as Hindustan Aeronautics Ltd (HAL), Bharat Electronics Ltd (BEL), the Ordnance Factory Board and with private companies on various projects. We are also in talks with HAL for an airborne electronic warfare system. We are also discussing the possibility of forming joint ventures for various programmes. India is an important marketing and manufacturing hub for us.
What kind of offset opportunities will Saab’s deals throw up? (Under the offset policy, defence contractors such as Saab that win deals from India will have to source components or systems worth a certain proportion of the deal from Indian companies.)
The defence procurement policy of 2011 gives us an opportunity to work in dual aerospace domains. We can leverage both civil and military areas as far as offsets are concerned. We are into both spaces and that will help us go a long way in fulfilling our offset contracts. On the MMRCA front, we are offering complete technology transfer, which means we will share the latest technology on Gripen NG. It will be complete, with system and subsystems, including source codes. So it will be an Indian Gripen that is inducted into the Indian Air Force (should India choose the aircraft).
And on the political front we are (from) a neutral country (Sweden), non-aligned like India and we don’t have any bars, and that is why we are ready to share complete technology with India.
How ready and prepared are Indian companies to absorb technologies being offered by you either as an offset contract or through a joint venture?
The firms in India require a lot of training as the Indian defence industry is still at infancy stage. We bring in technology through these offsets (or) joint ventures and train them; invest here; and turn India into supply chain hub. I think aeronautics is a critical domain area and technology in this area is required in India because the country needs to build aircraft, missile systems and communication systems. India is going to benefit if the Indian government allows technology transfer under the offset ambit. We will be able to share the latest technology and so will other global firms.
What do you expect from the Indian government in terms of its Foreign Direct Investment (FDI) rules?
We want FDI to be raised from 26% to 49%. The reason is, we want intellectual property rights and that will be possible if we have a slightly higher margin of investment. India will benefit; it will get the advantage of having our supply chain to get into the market.