Analysts say that the partnership with Adani, which has taken quiet if baby steps towards the defence sector over the last two years, may give the Swedish firm a decisive edge.
New Delhi: Sweden’s Saab plans to announce a partnership with the Adani Group and throw its hat into India’s search for single-engine fighter jets, a competition that has seen interest from a Tata-Lockheed combine.
As The Wire has reported, the inefficient Rafale jet deal has left the Indian Air Force (IAF) with gaping holes in its ageing Soviet MiG-21 fighter fleet – defence ministry officials say that the airforce will require 200 single-engine fighter jets. In October 2016, the IAF put out a call for what will be roughly be 10-11 squadrons of medium multi-role combat aircraft.
It has long been rumoured that Saab – which is offering its Gripen E multirole combat aircraft – was planning to tie up with the Adani Group as its local Indian partner, the way Rafale has done with Reliance or Lockheed with the Tatas. According to three people with direct knowledge of the matter, the Saab-Adani partnership was officially confirmed a few weeks ago.
Independent defence consultant Ratan Shrivastava also told Reuters that the partnership will be publicly announced on Friday, when the Swedish defence firm has scheduled a press conference.
Corporate alliances aimed at bagging the lucrative defence contract have largely been targeted under Prime Minister Narendra Modi’s ‘Make-in-India’ initiative and also the defence ministry’s “strategic partnership policy”.
When the Tata-Lockheed partnership was announced, sources told The Wire that if the F-16 jet was chosen, Lockheed would push for a joint-venture model where the Indian partner would be a “majority owner”. The Tata Group firm that Lockheed is likely to work with is Tata Advanced Systems, which has in the past worked with the US manufacturer for a transport aircraft programme.
The Adani Group, however, is different. It doesn’t have a long history in the defence sector like the Tatas. Nor has it forged its way into the defence with a big acquisition, the way Anil Ambani’s Reliance Defence did with Pipavav Defence for Rs 2,100 crore in 2015.
Over the last two years, the Gujarat-based conglomerate, whose boss Gautam Adani is considered close to Modi, has quietly made a few moves in the field of defence and aerospace production. In March 2015, the group set up a new entity called Adani Aero Defence Systems and Technologies, which applied for a licence to manufacture helicopters.
A year later, in March 2016, following Modi’s trip to Israel, the defence subsidiary also formed a partnership with middle-east nation’s Elbit-ISTAR in the field of unmanned aircraft systems. At the time, the company stated that Adani Aero Defence Systems had interests in “design, technology development, technical collaboration, system integration services for aerospace and defence equipment and systems”
The Wire, in February 2017, analysed the differences between Lockheed’s F-16 and Saab’s Gripen aircraft. At the time, Indian government officials had told The Wire that while the Gripen E aircraft scores over the F-16 on most metrics, on a per-unit basis, it is around 25% more expensive.
Over the last six months, Saab has met with multiple senior defence ministry officials and promised the moon and more. In addition to a heap of sops aimed at helping the Tejas programme, the Swedish firm has stated that ti will set up a new product facility and dedicated Gripen design centre.
According to industry sources, Saab’s decision to partner with Adani may give it a decisive edge, although a few industry officials expressed concern.
“What expertise does Adani have when it comes to aerospace manufacturing? Has the strategic partnership policy been reduced to finding Indian partners that can help merely lubricate the deal and provide connections,” a senior industry official, who declined to be identified as he is not authorised to speak to the media, told The Wire.