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New Delhi: Swedish defence major Saab AB is said to be in talks with at least half-a-dozen large Indian companies to explore tie-ups to locally produce its latest Gripen E fighter jet, even as India’s Narendra Modi government looks to modernise its military and boost defence manufacturing.
Among the Indian firms Saab is said to be looking for partnership are the Adani Group and Mahindras in the private sector and the state-owned Hindustan Aeronautics Limited and Bharat Electronics Limited, according to persons with knowledge of the talks.
There could be more than one Indian company as the main partners for Saab to build the Gripen E combat plane that was unveiled to the world market on May 19 at Linkoping, Sweden. There would be a few hundred partners to complete the Tier-2 and Tier-3 supply chain.
“Saab is talking to at least six large companies in India as the main partners,” according to Industry sources, who requested not to be identified.
“What Saab is doing now is identifying the ecosystem, which is not just one partner. Saab is going out to all the known suppliers of avionics, electronics and aerostructures for its products in India. It is still evaluating its likely partners and most likely it will need more than one.”
Saab AB and American aerospace companies Lockheed Martin and Boeing Company have all pitched for the next big fighter jet contract in India, which may be announced next year. India still needs hundreds of warplanes after Prime Minister Narendra Modi scaled back an order for Rafale jets in April 2015 to 36 from the previous 126, required under a July 2007 tender tanked.
Rafale had been selected under that tender in early 2012 and a three-year negotiation on price and other modalities of the unsigned contract since then had remained inconclusive even in April 2015. Since Modi’s announcement of the 36-plane Rafale purchase, India and France are still negotiating the government-to-government contract.
India’s Defence Minister Manohar Parrikar has since said more than once that the country needs to have local production lines for at least two types of fighter aircraft.
In May 2016, Lockheed Martin said it was leaning toward the Tata Group as a potential partner to build its flagship F-16. Boeing too has offered to manufacture its F/A-18 fighter jet — the mainstay of the U.S. Navy — in India.
India is said to need at least another 100 combat planes at the earliest to stem a steep slide in its combat aircraft fleet of 650 planes, a third of which are over 40 years old. India’s air force has already begun phasing out the four-decade-old Soviet-era MiG-21 and MiG-27s, numbering nearly one-third of the 33 fighter squadrons currently in service. That many in-service squadrons are way lower than the sanctioned strength of 42 squadrons, projected as a requirement to bolster its military capabilities against arch-rival China.
On July 1, India took steps to partly plug the fleet gaps by inducting two locally built ‘Tejas’ aircraft, nearly 33 years after the Defence Research and Development Organisation began designing and developing the Light Combat Aircraft (LCA). It now plans to induct another 38 Tejas to form the first two squadrons of the indigenous aircraft, manufactured in Bengaluru by the state-owned Hindustan Aeronautics Limited.
Saab AB’s plans the tie-up with the Indian firms, including HAL, for the Gripen aircraft primarily to support Modi’s ‘Make in India’ initiative to boost local defense industry. As part of its pitch to India, Saab AB has also offered help India on its Tejas aircraft and the futuristic Advanced Medium Combat Aircraft programs.
“In India, what we say is we are offering an aerospace capability for the next 100 years. What we mean by that is related to ‘Make in India’ set up,” a Saab official said.
“We are offering to help HAL for the Tejas and we are offering our own very latest AESA radar, in package with our EW and weapon integration. We will not just offer to produce Gripen in Sweden and ship it here. We are also offering to do the technology transfer for the aircraft.”
Saab AB has already responded to a Request for Information from HAL for the Tejas aircraft’s radar, electronic warfare system and weapons package.
The company also intends to use its current partnerships with Indian companies such as Aequs, an aerospace company based in southern city of Belgaum in Karnataka with which it has a Joint Venture for aerostructures. It also has a research and development center in association with Indian company Tech Mahindra in another southern city of Hyderabad in Andhra Pradesh, where over hundred engineers are already working on the design and development of Gripen aircraft for Sweden and Brazil.
Now, Saab AB is working on supply management planning, reconnaissance of likely partners, meeting up with these companies, and evaluating them. “We are now building up a supply management capability in Hyderabad, which will be accelerating this work to identify the ecosystem for Gripen manufacturing,” the company official said.
Saab AB is also looking to take advantage of the Modi government’s June 20 policy tweak to allow 100 per cent foreign investment in the defense sector.
Saab AB would want to do 100 per cent investment in India in the coming years, for manufacturing some parts of the Gripen locally. For other parts, it would join hands with more than one large Indian company.