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Business News/ Companies / Mahindra signs initial deal with Airbus to make military helicopters in India
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Mahindra signs initial deal with Airbus to make military helicopters in India

The companies plan to set up a final assembly line in India, develop suppliers and make extensive transfer of technology, to achieve 50% indigenous content

In July, Mahindra Defence and Airbus Helicopters had signed an in-principle agreement to set up a joint venture to manufacture helicopters in India. Premium
In July, Mahindra Defence and Airbus Helicopters had signed an in-principle agreement to set up a joint venture to manufacture helicopters in India.

Mumbai: The defence production firm of the Mahindra Group, Mahindra Defence Systems Ltd and Europe’s Airbus Helicopters on Sunday signed a so-called statement of intent to produce military helicopters in India.

The companies plan to set up a final assembly line in India, develop tier-1 and tier-2 suppliers and make extensive transfer of technology, to achieve 50% indigenous content.

In July, Mahindra Defence and Airbus Helicopters had signed an in-principle agreement to set up a joint venture to manufacture helicopters in India, seeking to tap a military hardware market estimated to grow to $41 billion in seven years.

Statement of intent reflects the firm commitment of both companies to make helicopters locally. Both companies will identify potential industrial sites, screening of existing local supply chain and defining initial work packages to be transferred to India, Mahindra Defence said on Sunday.

The statement of intent was signed in the presence of Prime Minister Narendra Modi and the visiting French President François Hollande. “Through this partnership, we target building several of our globally leading helicopter models in India. This will lead to the transfer of state-of-the-art technologies, development of manufacturing activities and creation of high-skilled jobs in India," said Guillaume Faury, Airbus Helicopters president and chief executive officer.

Mahindra Defence and Airbus Helicopters have already initiated industrial relationship to produce helicopter parts locally and are defining additional work packages to be industrialised in India.

“We have made significant progress in setting up the joint venture and together the companies are creating a world-class advanced helicopter production facility in India," said S.P. Shukla, group president, aerospace and defence, Mahindra & Mahindra.

Modi’s emphasis on defence equipment forming part of his ‘Make in India’ campaign to encourage manufacturing and attract foreign investment has seen a scramble among companies for licences to manufacture defence equipment.

India will see a total defence budget allocation of $620 billion between fiscal years 2014 and 2022, of which 50% will be capital expenditure, according to a report released in February by lobby group Federation of Indian Chambers of Commerce and Industry and financial services company Centrum Capital Ltd.

The annual opportunity for Indian companies—both state-owned and private—is expected to touch $41 billion by fiscal year 2022 and $168 billion cumulatively, it said.

US helicopter maker Sikorsky Aircraft Corp. also announced its intention to make helicopters in India. It will manufacture the aircraft with its existing partner, the Tata Group, or through new tie-ups, Sikorsky executives said.

Sikorsky, a unit of United Technologies Corp., now manufactures helicopters at its Connecticut facility. It has a tie-up with Tata Advanced Systems Ltd, a Tata group company, to make S-92 helicopter cabins at a facility in Hyderabad for the global market.

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Published: 24 Jan 2016, 11:29 PM IST
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