INSUBCONTINENT EXCLUSIVE:
that's known as the world's biggest arms importer, India's defense market is a notoriously difficult nut to crack.Airbus SE hasn't won a
single military contract for half a century
Unperturbed, the European firm is building a supply chain in the South Asian nation, training and expanding a slew of existent part-makers
that already help it build commercial jets
The hope is to easily meet local sourcing norms when, and if, it eventually wins an order.Airbus isn't alone
The likes of Lockheed Martin Corp., Saab AB and Boeing Co
-- gearing up to bid for the world's biggest fighter jet order in play -- are also looking for more local partners who can build
sophisticated parts for defense products
At the heart of the development is India's insistence on local manufacturing, which mandates that at least 30 percent of parts in imported
defense products are made in India.Building a self-sufficient domestic arms industry -- a key facet of Prime Minister Narendra Modi's push
to increase the share of manufacturing in the country's economy -- will be at the forefront of a government-organized defense expo near
Dozens of foreign and local companies are hoping to catch PM Modi's eye when he addresses the event on April 12, aiming to win a chunk of
business for India.Still, local production and sourcing is not a natural fit for the majority of companies
Most original producers of defense goods are actually assemblers rather than manufacturers, and setting up shop in India requires not only
investing in training a local supply chain, but also convincing major global part-makers to do the same.Make in India OfficerAirbus is a
In 2016, less then two years after PM Modi took power, Airbus appointed Ashish Saraf as its 'Make in India' officer, the only company to
His job is to ensure a credible supply base in India that can contribute to the company's defense products
It's also a strong signal to the government about its seriousness to build in India."It is a dual industry where people who do defense goods
also do commercial aerospace goods," Pierre de Bausset, managing director for Airbus Group in India, said in an interview in Hyderabad last
It makes sense to "leverage what we are doing in commercial aerospace to be relevant in defense campaigns -- whether they are for
helicopters, for defense airplanes."The opportunities are immense
India will set up a budget of $620 billion in the eight years to 2022, and local and foreign firms would have business opportunities of $168
billion, according to a study by the Federation of Indian Chambers of Commerce and Industry and Centrum Capital Ltd.$15 Billion DealThat
potential has attracted companies like Lockheed Martin Corp., the world's biggest defense contractor
Lockheed is pitching its F-16 fighter jets for a tender for 110 combat aircraft worth at least $15 billion, and has vowed to move its entire
production line for the jet to India if it wins the deal."This will put India right into the biggest fighter's global supply chain
immediately," Phil Shaw, who heads Lockheed's India operations, said in an interview in New Delhi
"That will give a leg up to what the government is looking for -- to try and get an ecosystem developed."One potential roadblock is India's
he's been bogged down by a defense procurement process that's known for delays, backtracking and corruption, making it a sensitive,
slow-going process.The warplane deal is a prime example
India started looking for new warplanes in 2007, a contest that ended with the government selecting Dassault Aviation for 126 Rafale jets
With talks stalling over price and quality guarantees, the government scrapped the purchase in 2015 and bought 36 jets separately to speed
India, last week, started the entire process all over again.Nowhere is the rush to boost local manufacturing more visible than in the
fighter jet deal that's still to be concluded
While Lockheed has partnered with salt-to-software conglomerate Tata Group to bid for the order, Saab has teamed with billionaire Gautam
Adani to offer its Gripen jets
The order mandates that at least 85 percent of the planes are built in India."Our plans in India are based not just on selling products but
on creating a defense eco-system which would involve hundreds of Tier-1, -2 and -3 partners, vendors and suppliers, " said Mats Palmberg,
vice president of industrial partnerships and business area, aeronautics at Saab AB
