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$10-billion fighter deal hits tech-transfer air pocket
NEW DELHI, NOVEMBER 6: India’s $10-billion single-engine
fighter jet deal is believed to have hit a stumbling block over the contentious
issue of transfer of technology (ToT) and equity participation. This is while
negotiations are on for the purchase of more Rafale jets from France.
The two main contenders for the deal — Lockheed Martin
and SAAB — have made it clear to the Defence Ministry that they will not go in
for a complete transfer of technology (ToT) with 49 per
cent equity participation in the joint ventures that they have inked with their
respective Indian partners, sources told BusinessLine.
Under the defence foreign direct investment rules, global
OEMs can invest more than 49 per cent with prior government
approval. However, the fighter-jet deal has to be executed under the new
‘Strategic Partnership’ (SP) policy, and as per the norms laid out in this
policy, it is the Indian entity that will have a controlling stake with 51 per
cent.
The Defence Ministry is looking to acquire at least 100 of
these jets for the Indian Air Force (IAF). While the US’ Lockheed Martin has
offered the advanced F-16 Block 70, Swedish defence major SAAB has
presented its single-engine multi-role Gripen E for the programme.
Lockheed Martin and SAAB have also joined hands with Tata
Advance Defence Systems Ltd and the Adani Group, respectively, to design,
develop and produce the warplanes in India under the ‘Make in India’ programme.
The issue of proprietary technology was also raised by US
Secretary of State Rex Tillerson during his visit last month. He made it clear
that ToT will come for a price.
The government is now looking at a follow-on order to buy
more Rafale jets, which will be in addition to the 36 bought in September last year for $8.9 billion. The IAF is also
keen on buying more of these warplanes, according to sources.
The decision to buy more Rafale jets from Dassault
Aviation is likely to be announced during the visit of French President
Emmanuel Macron in December, sources added.
However, the sources said, India has already informed the
French that “not a single” Rafale will be bought in flyaway mode — they will be
built in the Dhirubhai Ambani Aerospace Park, run by Reliance Aerospace Ltd and
Dassault Aviation in the Mihan Special Economic Zone in Nagpur.
Dassault Aviation Chief Eric Trappier had recently said,
in France, that the company is in talks with India for more orders.
(This
article was published on November 6, 2017)
Original post: thehindubusinessline.com
The government is now looking at a follow-on order to buy more Rafale jets, which will be in addition to the 36 bought in September last year for $8.9 billion. The IAF is also keen on buying more of these warplanes, according to sources.
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