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.
Saab has become the first foreign company to bag 100 per cent 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 per cent 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 per cent FDI in defence. The nod for 100 per cent 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.
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.
