New Delhi: With a stable Indian government in place following the April-May general election, global defence manufacturers are expecting the modernization of armed forces to gain momentum. Dick Olver, chairman of UK-based BAE Systems Plc, said in an interview that his firm is eyeing opportunities in naval systems, artillery and internal security in India, besides the land systems it is working on with auto maker Mahindra and Mahindra Ltd (M&M). Olver, who was on a visit to India after a gap of a year and a half, also admitted that there were some issues in the $1.2 billion (Rs5,784 crore) deal for Hawk trainer jets supplied to Hindustan Aeronautics Ltd. Edited excerpts:
How did your meetings with the defence ministry officials go?
We have had a good reception. People are listening to all our issues and concerns and are being very open, helpful and transparent.
Eyeing opportunities: Dick Olver says his firm has a long-term strategic aim in India. Ramesh Pathania/Mint
Did you have any specific agenda?
We talked about a lot of things including the move from 26% to 49% (stake in the joint venture with M&M), which is a very strategic issue both for the government and us.
Is there a time frame for this?
I think that there is really very little resistance to it. I think the question is finding the right moment, where it comes to the top of the political agenda. I can’t be precise. We have a long-term strategic aim in India (and) we understand that patience may be part of that.
What will you be able to do if you have a 49% stake that you cannot do now?
Well, obviously it will encourage us to do a huge amount more. One of the things we are doing right now is taking technology from South Africa for mine-resistant vehicles, which has worked incredibly well in the US for the marine corps and the army. And we are looking at this and asking ourselves how can this be redesigned with more Indian content—shaped and sized for Indian requirements—and (for) Indian mine-resistance requirements. And (we are) bringing that to India in the next 90 days to start testing with not only the ministry of defence but also (internal) security. This vehicle will be useful for both. So, I mean obviously we are doing that, but if we were at 49%, we would be rather more enthusiastic to do that and other things.
What would the other things be?
All land systems. This might include artillery, combat vehicles, heavy truck requirements, all sorts of things.
Besides land systems, which are the other business areas that you are looking to venture into?
Yes, we are very interested in naval systems and we have a large naval system business. In the US we have a big ship repair maintenance and upgrade facility for the US navy. In the UK, we build everything from nuclear-powered submarines to aircraft carriers. So, we have basically two things, which I understand from our conversations, are (attractive to) India...one is the design capability—maritime design in OPVs (offshore patrol vehicles) and other ships—and we also have a construction capability both in the UK and the US for construction of OPVs. One question now is—is that the place to start in naval in India? We are in the thinking process.
Why did you pull out of the 140 ultra-light 155mm howitzer gun contract worth around Rs3,000 crore?
We decided not to respond for lightweight guns for reasons of some issues in the RFP (request for information by the defence ministry).
If you go back now to the defence ministry, will you use the US FMS (foreign military sales) route since 70% of the gun is US-made and is assembled there?
Our job is to advance the merits of the gun to the customers. If the customer wanted to do that, it would be a matter between the two governments. In this case the governments would be India and the United States. We are ready to work with the customers to try and meet the requirements.
There have been issues lately where HAL has been upset due to non-availability of spare parts for the Hawk advanced jet trainer?
Well, that’s an issue with the first Hawks and wherever they have had a problem we have supplied spares. I think there are one or two ongoing issues. But in respect of all of them we are helping.