A strong ‘Make in India’ theme will be behind US aircraft maker Boeing’s pitch for the Indian Air Force’s order for 110 fighter jets. The order, worth around Rs 800 billion, seeks commitment from vendors to supply sensitive technologies as well to carry out a bulk of manufacturing in India.
For the current order, Boeing has tied up with Mahindra Defence System and Hindustan Aeronautics Limited for producing F/A-18 Super Hornets. “The RFI (request for information) is much contemporary this time. It broadens the scope and competition. It focuses on the IAF’s real war-fighting capabilities. Our joint venture is an optimum mix of capability, cost and industrialisation,” Pratyush Kumar, president, Boeing India, said in an interview.
Kumar said the US government’s willingness to liberalise rules on transfer of technology (ToT) gave them a leg-up against competitors. “I don’t think ToT is an issue. It is not us but the US government is saying that rules will be more forward-looking. The US now recognises India as its ‘major defence partner’ and they are much more forward-leaning and sharing technology with India,” he said.
Recently, Kenneth Juster, the US ambassador to India, indicated the same. “The United States plans to offer India certain technology and platforms that we have offered to no other country in the world. We are going to be very forward-leaning in technology, the transfer of technology, and indigenous production that we can offer to India,” he had said.
Several foreign manufacturers have objected to ToT without a majority stake in a partnership. Under the current strategic partnership model, it is mandatory for an Indian firm to have at least a 51 per cent stake. Kumar said that having a public sector player as partner made their case of indigenisation stronger. “With a public-private partnership approach, I am bringing the best of public sector and private sector — the only two companies in India which have manufactured airplanes,” he said.
Boeing’s probable rivals in the process, Dassault, Saab and Lockheed, have chosen private players Reliance, Adani and the Tatas as their respective partners. “The only company which has achieved something in aircraft manufacturing is a public company. The industry I believe cannot suddenly ignore them and go for other, that’s not wise. We brought our industrial partners and spoke to almost 400 companies in the sector. We realised ignoring HAL is a bad idea,” he said.
After criticism that the new defence policy did not envisage any role for defence PSUs, the government is now mulling a change to allow them to forge joint ventures with foreign partners.
In terms of capability, Boeing will be pitching the latest design of F/A-18 Super Hornet aircraft, the most advanced and cheapest to operate. “We are capable of supplying aircraft to India that we are supplying to the US today. It brings advance capability that will be supplied to US defence forces in the foreseeable future. Cost-wise, it is much more affordable, having the lowest cost per flight hour than any aircraft in the US air force inventory,” he said. Recently, the US navy ordered 24 F/A-18 Super Hornets.
Kumar also stressed that an order was essential to kickstart the defence indigenisation story and encourage global giants to invest in India. “In defence, it’s a monopoly situation. You have only one buyer. So if we don’t have that buyer with any order in near foresight, it’s too much risk to invest in capacity. The best way for the government to catalyse investment is to make orders. Not simple RFI and RFPs. We need actual orders,” he said.