India has approved the first-ever 100% foreign direct investment (FDI) in the defence industry, allowing Swedish company Saab to establish a new facility for the production of rockets, according to a report in The Economic Times.
According to sources, the FDI proposal which was approved last month was worth less than Rs 500 crore. At the moment, India’s automatic route permits up to 74% FDI in the defence industry. The clearances beyond that could be acquired on an individual basis. Despite the 2015 relaxation of clearance requirements, no foreign company had yet been granted authorisation for 100% FDI in defence.
Saab FFV India a recently registered company, is going to manufacture the most recent version of the Carl-Gustaf M4 system. The facility which is anticipated to be built in Haryana would have cutting-edge technology like sighting technology and carbon fibre wrapping for the Carl-Gustaf system. The Indian armed services currently employ shoulder-fired rockets extensively and if indigenous production kicks off, they would also be available for export.
The Carl-Gustaf M4 is a recoilless man-portable, recoilless, multi-role weapon system which can use a wide variety of ammunition. It is a lightweight, low-cost weapon that uses a wide range of ammunition, which makes it extremely flexible and suitable for a wide variety of roles. Its programable and versatile ammunition makes it an anti-armour, anti-structure and anti-personnel weapon system.
The system is a total package of weapons, sights, ammunition, training and support. Developed by Saab Group, the Carl-Gustaf M4 is an upgraded version of the earlier Carl-Gustaf M3 recoilless rifle.
Mats Palmberg, chairman and managing director of Saab India stated, “We are proud to be the first global defence company to be approved by the Indian government for 100% foreign direct investment for our new Carl-Gustaf manufacturing facility in India. This is another step in Saab’s commitment to ‘Make in India,’ and we look forward to continuing our collaboration with our Indian partners and to supporting the Indian armed forces with the production of Carl-Gustaf in India.”
Production of the Carl-Gustaf M4 is scheduled to begin on this line next year, marking Saab’s first production plant outside of Sweden. The United States, European and Indian armed forces employ the shoulder-launched weapon system to destroy enemy locations that are defended, along with their armour and men.
The first foreign business to apply for approval of 100% FDI to establish an Indian subsidiary in order to develop cutting-edge equipment that would increase submarines’ underwater endurance was the French company DCNS in 2016. It had applied for permission to invest more than Rs 100 crores in DCNS India Pvt Ltd in order to develop innovative key defence technologies but it was not granted the necessary authorisations.
