Logistics

Airbus aims to invest Rs 5,000 cr in India

Nayanima Basu New Delhi | Updated on January 20, 2018 Published on March 14, 2016

Airbus Group India is aiming to invest Rs.5,000 crore even as it expressed concerns over 49 per cent foreign direct investment (FDI) limit in the defence sector as it restricts them from have control and ownership rights.

“We have a planned investment of Rs.5,000 crores and the potential to create 10,000 highly-skilled blue-collared jobs,” Pierre de Bausset, President and Managing Director of Airbus Group India said during a press conference here on Monday.

However, the European conglomerate expressed serious concerns over the country’s Foreign Direct Investment (FDI) policy that allows 40 per cent foreign equity under the automatic route.

“This has to be a win-win partnership. If we are bringing investments, technology and products on the table then we need more control. So honestly, the 49 per cent limit is not a good limit … I want fair business. Fair business means that we need to have levels of control that are appropriate for the risks that we are taking,” Bausset said.

The FDI policy on defence sector stipulates that 100 per cent FDI can be allowed under the government route provided the foreign entity is bringing into the country state-of-art technology. “The policy is at odds and it is very set at 49 per cent. It is not going to get an industry and it is not going to get OEMs of quality. You may get a few but not the right ones,” he added.

The company also stated that it is planning to establish full assembly line for its fixed wing C295W military transport aircraft in partnership with TATA Advanced Systems. The plan is to assemble 40 such medium utility transport aircraft in India while the Ministry of Defence will be buying 16 off the shelf.

Airbus is supplying 56 C295W for the Indian Air Force (IAF) in a bid to replace the ageing Avro fleet. The selection process for these aircrafts to India is still underway between Airbus and Ministry of Defence.

However, Bausset said, he is expecting field evaluation trial of these aircrafts in the “near future.”

The €64.5 billion Airbus is also eyeing deals in the military helicopters segment. For this it has also announced a joint venture with Mahindra Defence. It planning to locally manufacture and sell naval utility helicopters, reconnaissance and surveillance helicopters and naval multirole helicopters.

These are called Panther (AS365 MBe), Fennec (H125M) and Caracal (H225M).

For Panther helicopters, Airbus has offered the government to shift its final assembly line to India from Paris.

According to Xavier Hay, President, Airbus Helicopters Division in India, if the government permits then the Panther assembly line can be relocated to India, which can be eventually integrated with their global assembly line thereby making India a global export hub for Panther Helicopters.

Airbus Helicopter (AH) has been selected as a preferred bidder by the Indian Coast Guard with the Caracal (H225M), Hay added.

Airbus will be showcasing the scale models of its military helicopters at the Defexpo 2016 in addition to the C295W military transport aircraft.

Published on March 14, 2016
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