France may pip USA by entering into joint production with India for key defence equipment

France may pip its NATO ally USA by entering into joint production and co-development with India for a key defence equipment -- short range air defence missiles -- through transfer of know-how and technology, in what could boost the Modi government's goal to attain self-sufficiency in military matters.

While the proposal to jointly develop this system was initiated during the Congress-ruled UPA regime it did not see light of the day under them. Sensing that the Modi government has made joint production and co-development of defence equipment with foreign partners as its mantra from the initial days, France has tried to seize the opportunity by moving Defence Minister Arun Jaitley on the issue.

ET has learnt that French Defence Minister Jean-Yves Le Drian has recently written to Jaitley to expedite signing of the contract for co-development of SRSAM - surface to air short range systems. "This project would enable India to get in a few years in the area of strategic missiles, the maximum autonomy you have called for," Le Drain wrote in his letter, a copy of which is available with ET.

France will be the second country after Russia to co-produce missiles with India if the project fructifies. India and Russia have jointly produced Brahmos missiles which could now be exported to countries including Vietnam, Indonesia and Venezuela.

The Indo-French project also has a huge export potential, official sources told ET. It may be recalled that France is one of the key defence suppliers for India particularly for the Air Force for over decades. India has decided to purchase 126 advanced fighter jets from France.

The French Minister said in his letter specified that three years after signing of the contract Bharat Dynamics Limited (BDL) will have an independent production capacity in Hyderabad and that it will be able to deliver the first missiles a year later.

"This project will enable India to create in time numerous highly skilled jobs...France will carry out a very substantial transfer of know-how and technology, particularly in the field of missile guidance, to BDL who will be prime contractor for production," Le Drian assured.

Referring to Modi's agenda of attaining self-sufficiency in defence sector, the Minister wrote "I know how much importance your government attaches to the development of an autonomous defence industry. France intends to make all necessary efforts and take all necessary initiatives to participate towards this objective."

The Minister also assured that Paris will ensure proper execution of the contract though a bilateral committee.

The negotiations for the project were started in 2007-08 and industrial negotiations were closed since 2011. During talks between French President Francois Hollande and the then Prime Minister Manmohan Singh in January 2013, the two sides had stated that negotiations for finalization of the joint development programe have been concluded.

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