Saab, Adani Group in discussions for fighter jet manufacturing deal

Saab is the second firm after Lockheed Martin Corp, the maker of F-16 jets, that is in the race for for India’s next multi-billion fighter jet order


The Saab Gripen fighter jet at the Aero India Bengaluru air show. Photo: Bloomberg
The Saab Gripen fighter jet at the Aero India Bengaluru air show. Photo: Bloomberg

Bengaluru: Saab AB of Sweden, makers of Gripen fighter jets, is in talks with the Gautam Adani-led Adani Group for a manufacturing partnership, a person aware of the development said.

Saab is one of two firms in the race for India’s next multi-billion fighter jet order. The other is Lockheed Martin Corp. of the US, which makes the F-16 jets. Saab has promised to build what it calls a world-class fighter jet facility in India if it wins the order, and has showcased its products at the ongoing Aero India 2017 air show in Bengaluru.

India is likely to need 200 more fighter planes and has sought proposals for single-engine fighter jets. The planes will be procured under a new method in which a government panel will prescribe a model to select an Indian partner. The Indian company will exclusively manufacture military equipment for a specified period.

The foreign partner will be chosen on the basis of transfer of technology and the financial pitch.

“There were talks between Saab and Adani to look at this space,” said a person aware of the matter, who did not wish to be named.

Saab’s aeronautics head Ulf Nilsson confirmed the talks with Adani Group.

“We are in discussions, but I won’t want to comment at this stage on specifics. We will come back to that (later),” Nilsson told Mint.

Anil Ambani-led Reliance Group has already formed a joint venture firm with Dassault Aviation SA of France for the manufacture of 36 Rafale aircraft, which India ordered for $8 billion.

The Adani Group entered the defence business in 2015. At Aero India, it showcased its Israeli Hermes 900 multi-role unmanned aerial system under the joint venture called Adani-Elbit Advanced Systems India Ltd.

To a query on what the Adani Group, which has just entered the space, will bring to the table, Nilsson said they were looking at various opportunities.

“You have to start to see what we are offering when it comes to technology transfer; it’s not a normal technological transfer. So you build factory, you produce aircraft, transfer design, development, capability to India. Then, you have to build an ecosystem for an aerospace industry, you have to have partners in different areas—you have to build hangars, infrastructure, air strips, transportation, and then, of course, the technology around the fighters like the sensors. That’s why we have to think with a broad perspective to build a complete ecosystem,” Nilsson said.

In Brazil, where Saab has sold its Gripen jets, it is establishing similar capabilities with five partners.

“If you compare with Brazil, there are five main partners that we work with, including Embraer SA. Some are good in simulators, some in factories, some in avionics. More of this spread (in India too). Maybe (we will have) one lead partner, then the others,” he said.

Saab has also held talks with the Tata group and Mahindra Group for this deal, he said, without elaborating.

Still, everything will depend on what the Indian government wants, Nilsson added.

“Do they really want to go with the more traditional set-up or do they want to push for more of new start-ups to see some other dimensions...so that’s why it’s a bit difficult to say anything,” he said. “If the defence minister pushes for a new start-up or existing firms (we have to see). We really want to know where they are leaning.”

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