New Delhi: Looking to deepen its roots in the Indian defence industry, Swedish defence manufacturer Saab plan to move in with 100 percent ownership in certain areas and become an integral part of India’s defence ecosystem and contribute to India’s national security capabilities got a major boost as New Delhi gave the green light to 100 percent foreign direct investment (FDI) in the defence sector.
Swedish defence company Saab has become the first foreign company to bag 100% FDI in India’s defence projects. Saab’s FDI proposal, valued under Rs 500 crore, was cleared in October. India now allows up to 74 percent FDI in the defence sector under the automatic route, with clearances beyond that available on a case-by-case basis. However, the clearance rules were relaxed in 2015, still, no foreign firm was able to get permission for 100% FDI in defence. The nod for 100 percent FDI is a significant development, reflecting the country’s willingness to attract foreign investment and expertise to boost its defence manufacturing capabilities and technology transfer. Also, the move can potentially lead to increased collaboration and tie-ups with global defence companies, contributing to the modernisation of India’s defence industry.
According to media reports, the company will set up a new facility in the country to manufacture shoulder-fired rockets. A new company – Saab FFV India has been set up by Saab – to make the latest generation of the Cal-Gustaf M4 system. This will be the first time Saab will manufacture shoulder-fired rockets outside Sweden. The shoulder-fired rockets are already in extensive use by the Indian armed forces. And, they can be even exported once local production begins.
A media report quoted Mats Palmberg, chairman and managing director, Saab India, as saying “We are proud to be the first global defence company to be approved by the Indian government for 100% foreign direct investment for our new Carl-Gustaf manufacturing facility in India.” Adding further, Palmberg said, This is another step in Saab’s commitment to ‘Make in India,’ and we look forward to continuing our collaboration with our Indian partners and to supporting the Indian armed forces with the production of Carl-Gustaf in India.”
Earlier, as per reports Saab had unveiled its vision of becoming an Indian company in the future and expressed its commitment to the ‘Make in India’ initiative as a strategic and long-term approach to its operations in the country. Saab’s commitment to Make-in-India and its continued partnership with Indian companies such as Munitions India Limited (MIL) and Advanced Weapons and Equipment India Limited (AWEIL) showed its keenness to foster local manufacturing and collaboration. The establishment of Saab FFV India for the manufacture of the latest generation of the Carl-Gustaf M4 system in India is indeed a significant development for both Saab and India’s defence sector. The facility, which is expected to be located in Haryana, will play a crucial role in advancing the country’s defence manufacturing capabilities.
