Pratyush Kumar, President, Boeing India, said the company is keen on bagging the deal offered by Indian Navy to procure 57 carrier-based multi-role warplanes for its F/A-18 Super Hornet. In an interview with BusinessLine on the sidelines of Aero India 2017, he said Boeing is on track on its investment plans and believes that the Trump administration will support their plans. Excerpts:

What is the update on your defence investment plans in India?

We are very committed to helping create the ecosystem for aerospace manufacturing in India plus from engineering to manufacturing of platforms to subsystems to skill development for factory workers to really support and sustain the platforms we have here. And we, very actively, engage around the entire ecosystem across the board. We announced the Boeing India Engineering and Technology Centre (BIETC). It’s all about scaling up our engineering footprint. We have doubled our sourcing from India through partnerships and manufacturing for a supply base in India. We have a robust supply base in India. We have direct network of 35 suppliers and 120 indirect suppliers in the country. We are half-a-billion dollar per year right now and we are growing. We have invested and announced a joint venture with the Tatas to manufacture fuselage for Apache, the most advanced attack helicopter. And we have been investing to create the infrastructure for sustainment and support of platforms that we have sold to our customers — Indian Air Force and Indian Navy.

What was the rationale behind setting up Boeing Defence India (BDI)?

BDI has been set up to basically to wrap it all up. It is going to transform us from being a sales outpost to really creating a full operating business in support of our customers and taking responsibility of the requirements and accelerating our engagement and helping create full ecosystem for aircraft manufacturing.

What about your plans to increase offsets?

We source about $500 million per year from India. We doubled it in the last two years and we are going to keep increasing that in the foreseeable future. We have more investments in the pipeline.

Do you see those investments flowing from US to India under President Donald Trump?

You have heard our story. We are staying true to this. The statements that emerge from US Secretary of Defence Jim Mattis and Defence Minister Manohar Parrikar is all about keeping on the DTTI (Defence Trade and Technology Initiative) engagement. So, we haven’t seen any signs of any slowing down of defence cooperation with India.

How keen are you on Navy’s offer to buy 57 carrier-launched warplanes?

We are certainly looking at the RFI (request for information) with a very keen eye. If any Navy were to acquire a carrier-launched fighter what is the most proven, the most advanced, most lethal, most forward looking, most upgradable fighter? It’s unquestionably the F/A-18. There are almost 700 of those with the US Navy. It’s battle proven, it has a long growth path, it’s designed for next 40-50 years, so we are looking at the opportunity. We are taking a close look at the RFI and are very excited about it.

How soon do you foresee the deal to fructify?

I wish I had the crystal ball to gauge that. In India that is unknowable.

Do you see the Rafale deal as a setback?

If it was a setback, we wouldn’t be talking today.

How crucial it is for you to have the chapter on ‘strategic partnerships’ under the new Defence Procurement Procedure (DPP)-2016?

It is very important. It is a declared policy of the government that the future of important platforms to ‘Make in India’ will be under the strategic partnership model. So, we think it is a crucial policy statement. We are eagerly waiting for the contours around the ‘strategic partnership’ model.

What are your expectations on the ‘strategic partnerships’ policy because the Defence Ministry is planning to have one player in one segment?

We do not know how the government is shaping that up. We are waiting to see how the broader parameters will be. I do not know yet what will be my preference in it.

Foreign players often complain about 49 per cent FDI although 100 FDI is allowed. Your comments.

Moving from 24 per cent to 49 per cent was definitely a step in the right direction and that really was a good thing for our joint venture with Tatas. It allows us to get going with that. We think that having critical technologies will only help India get a more FDI going. So more than 51 per cent is a good thing but we are working with even 49 per cent today so we look forward for continued engagement with Ministry of Defence for future opportunities.

Are you planning any such proposal of going for 100 per cent FDI?

It really depends on the opportunity. There is no such thing as 100 per cent FDI, it depends on the opportunity. There has to be a business case for that.

What is the status of your joint venture with the Tatas?

We were ahead of our critical milestones. The first parts from the JV will start flowing next year. We are very much on plan to meet that milestone. We have set up the manufacturing unit and we did 49 per cent FDI there. We took a business decision that it’s worth going forward with 49% restriction.

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