Opportunities brim in India's defence sector, leading to large scale tie ups between Indian
and foreign companies.
If it was L&T and Tata led the private sector bandwagon in the earlier days, the stage is
set for an Anil Ambani- Gautam Adani battle in the defence business now.
Both are new entrants in the sector and have entered into a slew joint ventures in the
recent times.
Bharat Forge, Reliance Industries, the Tata group, Ashok Leyland, Larsen & Toubro, the
Godrej Group and the Mahindra Group are fairly well entrenched in the business.
The JVs are formed at a time when India, the world's top defence importer, is conducting
a USD100-billion upgrade of its Soviet-era military hardware.
All the MiG 21s and MiG 27s in the Indian Air Force (IAF) arsenal is due to retire by
2025.
IAF has 33 squadrons of fighter aircrafts and the numbers are dominated by single engine
fighters.
Modi government has raised the limit on foreign investment in the defence sector and encouraged
tie-ups between foreign and local companies under the 'Make in India' campaign where the
Indian partner will remain the majority stakeholder.
India currently imports at least 90 per cent of its defence equipment including parts for
assembly.
India in 2016 agreed to buy 36 Rafale combat planes for around USD8.9 billion.
Some of the major JVs formed for win a slice of the defence pie are:
Adani - Saab
Sweden's Saab tied up with Adani Group to bid for defence deals in India, with a focus
on manufacturing Gripen fighter jets in the country.
"Our plans in India are to create a new defence eco system that would involve many partners,
vendors and suppliers.
Building new fighters is very similar to doing high technology projects in energy sector,"
said Hakan Buskhe, president and CEO of Saab.
The partnership will compete with U.S. defence giant Lockheed Martin in a two horse-race
to win a potential order from India's military for single-engine jets that will be produced
locally.
Together with the Adani Group, Saab will bid to make about 100 single engine fighters for
Indian Air Force (IAF), a contract worth USD 15 billion.
So far, Adani has no presence in the defence sector and no experience in the manufacturing
space either.
Gripen E fighter is Sweden's answer to the F-35 of Lockheed Martin.
The E fighter, the sixth variant in the Gripen family, is slightly bigger than previous versions,
has a stronger engine and updated radar systems.
It is designed to carry more weapons further, and to track multiple threats using the latest
type of radar.
Since 2015 a clutch of Adani executives were negotiating with the representatives of overseas
defence giants for tie ups, pitching the group's mainstay asset - the country's largest private
port and SEZ at Mundra in Gujarat - with its sea and land linkages as a possible manufacturing
location.
The discussions in some cases were led by Karan Adani, the elder son of billionaire
group chairman Gautam Adani.
In 2015 February, the group applied to the department of industrial policy & promotion
(DIPP) for a licence to manufacture helicopters under a new entity - Adani Defence Systems
& Technologies.
Marking its formal entry into defence, the company signed a statement of intent with
Elbit-ISTAR of Israel to work together in the field of unmanned aircraft systems (UAS),
commonly known as drones.
Under the agreement, the companies plan to set up a final assembly and integration line,
including MRO (maintenance, repair and overhaul) facilities by incorporating true transfer
of technology for supporting the product range during its lifecycle.
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