New Delhi: The makers of Eurofighter jets are in talks with Indian firms to plug them into the European consortium’s global supply chain, a senior company executive said on Monday, in potential deals worth millions of dollars.
The Eurofighter Typhoon jet is competing with US and Russian models to win a contract from India for 126 fighter jets, valued at around $11 billion. The Eurofighter jet is produced by a consortium of European firms including EADS, BAE Systems and Finmeccanica.
Boeing’s F/A-18 Super Hornet, Dassault’s Rafale, Lockheed Martin Corp’s F-16, Russia’s MiG-35 and Saab’s JAS-39 Gripen are also competing for the order.
India last year introduced a new rule that made it mandatory for foreign defence firms to buy 30% of equipment from local firms to boost the domestic defence sector, and is now looking to raise the figure to 70%% within a decade.
The level of local sourcing is a factor that India may consider while selecting a successful bidder, as are other parameters such as willingness to transfer technology to domestic firms or manufacture in India.
The stakes are high for domestic and foreign firms. India is one of the world’s biggest arms importers, and the government says it plans to spend more than $30 billion to upgrade its Soviet-supplied military hardware over the next five years to counter potential threats from Pakistan and China.
A new KPMG report tops this estimate, forecasting India to spend about $112 billion on defence procurement by 2016, creating offset opportunities worth $30 billion for the domestic industry.
Eurofighter sources said the Indian companies Eurofighter were talking to the defence systems unit of Mahindra and Mahindra and Hindustan Aeronautics Ltd.
Plans to engage with Indian suppliers were independent of the outcome of the 126 jets order that is likely to be awarded mid-next year, Eurofighter said.
“This demonstrates our commitment to integrating India into the programme as a true and equal industrial partner,” Bernhard Gerwert, chairman of the supervisory board of Eurofighter GmbH, told a group of journalists in New Delhi.
Cassidian Air Systems, part of the Eurofighter consortium, is holding talks for supply of mechanical and electronic equipment and avionics for the Eurofighter’s global supply chain.
Eurofighter has already opened a research and development centre in Bangalore and aims to hire 200-250 engineers by 2012.