Defence firms eye billion-dollar chance for 'Made in India'

Tuesday 22nd August 2017 10:41 EDT
 
 

World's largest defence importer, India has announced a new policy inviting foreign defence manufacturers to set up shop as minority partners in India. It said it would purchase tens of billions of dollars worth of foreign fighter jets, helicopters and armoured vehicles, as long as they are “made in India”. The brilliant scheme is sure to boost job creation and rope in key defence technologies into the country. Foreign companies are already calling it an opportunity too good to miss.

European Group Airbus said if it wins a contract worth several billion dollars and expected to span at least a decade, it would make India its global hub for it multi-purpose Panther helicopters. Lockheed Martin said if its F-16 fighter jets are selected it will “support the advancement of Indian manufacturing expertise”. Germany's ThyssenKrupp Marine Systems and France's Naval Group are most eager to compete for a contract of up to $10 billion to build submarines in the South Asian country.

India seeks to follow other countries that created defence sectors by backing a few big players with long-term defence orders and allowing smaller businesses to develop around them. Amber Dubey of KPMG consultancy said, “Countries that have a robust defence industry have a few large companies that are supported by their government with large, long-term defence orders. They in turn, create an eco-system of large and small suppliers to stay competitive.”

India currently imports at least 90 per cent of its defence equipment, including parts for assembly. For Indian companies with a majority stake, the new move is a big win as the government will line up domestic companies chosen by foreign players to set up local plants. The basic idea seems to bring up home industries to global standards to compete for the next round of orders.


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