SAAB Calls India’s New Defence FDI Model of Enhanced Investment up to 74% “Very Attractive”

Defence Industry

New Delhi: Swedish company SAAB has said that 74 per cent Foreign Direct Investment (FDI) in defence is a “very attractive model” but wanted clarification whether the Strategic Partnership (SP) model of the Defence Procurement Procedure (DPP) comes under it.

In a virtual interaction with the media, Mats Palmberg, Head of SAAB’s Gripen India campaign, said his company is planning to set up an advanced industrial body, the Indian Aircraft Company (INAC). “If the Gripen fighter is selected by the Indian Air Force (IAF) in the 114 fighter tender which is underway, then INAC will be set up.” “This will enable the Original Equipment Manufacturers (OEMs) have control over the setup and they can take responsibility and also meet customer expectations.”

Responding to a question, Palmberg said “the 74 per cent is a very attractive model. There is no clarity if Chapter 7 comes under it; we need some clarity on this.” To promote the private industry, SP Model comes under Chapter 7 in the Defence Procurement Procedure (DPP).

According to the Head of the Gripen’s India Campaign, there are still some issues including Liability Issue that needs to be clarified in the SP Model. “The OEM should have a bigger stake. This is better but this need not be for forever.”

Eva Soderstrom, Head of Industrial Cooperation, said, adding that “the latest Gripen E and also Gripen F which is a twin-seater variant under development has been offered by SAAB to the IAF.”

According to Palmberg “This (INAC) is a dual-track proposal. The first part is related to the Gripen fighter aircraft, The second part deals with the technological support to the indigenous fighter programmes like the Light Combat Aircraft (LCA) Mk2 and Advanced Medium Combat Aircraft (AMCA) which is currently under development.

This will be an industrial hub which the Swedish company is planning where from manufacturing, delivery, maintenance, repair and overhaul (MRO) all will be undertaken there. Also, the design capability will be used for further improvements.

“We don’t want the aircraft to go all the way to Sweden at any point for overhauling or anything,” he said.

Evaluation is going on of the proposals which have been submitted by global aerospace giants for 114 aircraft.

Once the specifications are finalised, it will be sent to the Defence Acquisition Council (DAC), for the Acceptance of Necessity (AoN). This will be followed by the issuance of Request for Proposal (RFP).

While the Swedish company is looking at a partnership with Defence PSU Hindustan Aeronautics Limited (HAL) in the INAC including as an equity partner, it is also open for partnerships with the private sector companies and DPSUs.

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