New Delhi: Swedish armaments maker Saab AB on Thursday said it will consider India as a global manufacturing base for its Gripen fighter jets if it is chosen as the winning bidder in an Indian Air Force (IAF) tender for 114 jets.
At a press conference in New Delhi ahead of the biennial Aero India Show in Bengaluru next week, executives at Saab, however, indicated they would like to see some changes in India’s defence manufacturing policy that requires foreign equipment manufacturers to partner with an Indian company to form a joint venture. According to the current rules, the Indian company remains the major partner in a joint venture.
Mats Palmberg, vice president for industrial partnerships at Saab, said should his company bag the deal, in the first instance, 18 of the 114 aircraft will be made in Sweden with Indians being present at the manufacturing facility there to acquaint themselves with the technology and manufacturing processes. The rest would be manufactured in India as per the defence ministry’s requirements that at least 85% of the jets be made in India, giving a big push to the ‘Make in India’ programme, he said.
Saab currently has a production facility in Sweden and another in Brazil for the Gripen fighter jets. Depending on other customer orders, the manufacturing facility in India could be used to make one out of three aircraft in the order book, he said.
Saab AB, Boeing Co., Lockheed Martin Corp., Dassault Aviation SA and a consortium of European companies were in the race for an Indian Air Force tender to procure 126 fighter jets in 2007. When the bids were opened, Dassault’s Rafale and the consortium’s Eurofighter Typhoon were found to be the most competitively priced with Rafale finally winning the contract.
When asked about Saab’s investment plans for the production centre in India, Palmberg did not give any details. He also declined to comment on which Indian company would be partnering Saab for manufacturing the Gripen in India.
“At the current point in time, I don’t want to answer questions on who we will partner with because if it follows the SP (strategic partnership) policy, it will be the Indian government that will appoint the partner that we will be working with," he said. Palmberg said Saab already has a partnership with the Adani group.
The current rules on foreign direct investment in the defence sector are a cause of concern for Saab because, Palmberg said, “I think it will be easier to do this (investments) in a comprehensive way and support India if we can have majority control during the execution of the project (manufacturing the Gripen in India)". “Because in the end we have to warrant (guarantee) everything."