While emphasising that its presence in India is part of a long-term strategy in the defence market, EADS feels that the current policy of limiting Foreign Direct Investment to 26 per cent is an impediment.
The fate of its campaign to bag the multi-billion dollar contract for Medium Multi Role Combat Aircraft notwithstanding, European consortium EADS Defence and Security (DS) wants to develop a competence centre in India for its global market.
EADS DS fielded the Eurofighter Typhoon to compete with five other manufacturers for the 126 fighter aircraft Indian Air Force wants. Last month, IAF completed flight evaluation trials. The five other aircraft in the race include F-16 and F/A-18 (USA) Rafale (France), Grippen (Sweden) and MiG35 (Russian).
“We want to develop a centre of competence and develop a product that can cater even for our global and European market,” EADS DS Chief Executive Officer Stefan Zoller told a group of correspondents from India at the Berlin Air Show, which marks its centenary year.
As part of expanding its footprint in India, it created EADS DS India Private Limited as a primary contact point of all its customers there. The R&D Centre at Bangalore began by recruiting eight engineers to work on electronic scan for radar and another set of five engineers for Eurofighter.
The EADS DS officials said the target is to have 250-odd engineers and initially use the Airbus facility available in India. EADS has existing partnerships with Defence Research and Development Organisation and Defence Avionics Research Establishment and is supporting the Light Combat Aircraft programme. Last year, EADS came in for LCA flight test work and recently was asked if it could assist in LCA naval version programme.
While emphasising that its presence in India is part of a long-term strategy to establish EADS as a major player in the defence market, the company feels that the current policy of limiting Foreign Direct Investment to 26 per cent is an impediment.
Dr. Zoller suggested EADS prefers at least 50 per cent stake, if not higher, and also assured orders in India for it to sustain R&D for the product it develops there. “We are starting a partnership and not looking at India as a market…for us it is an ideal source for know how …want to develop as a sole source of supply for single product for our global sales package,” the officials said.
Bernd Wenzler, CEO of Defence Electronics said EADS hopes to create 20,000 jobs for highly skilled personnel in case it wins the Eurofighter contract. He said the company created 2 lakh jobs in Europe for the programme that benefited some 400 main suppliers.
The Defence Procurement Policy offset clause makes it mandatory for companies, which win contract to source at least 30 per cent of value from domestic suppliers, which in the case of the MMRCA deal is higher.