French Naval shipbuilder DCNS is looking for an Indian partner to set up a fabrication facility locally for manufacture of warships and submarines for the Indian Navy, in a bid to tap the burgeoning domestic defence market.
The company, which has been participating in some projects of the Indian Navy, launched its Indian subsidiary, DCNS India, in Mumbai on Wednesday.
“As per Government policy, we cannot hold more than 26 per cent stake in the joint venture (with the Indian partner). But we are open to raise the stake if the (Indian) Government relaxes the FDI cap on defence projects,” Mr Xavier Marchal, DCNS’s Senior Vice-President (India), told Business Line. He said the Indian tie-up was likely to be finalisedwithin a year.
The Indian Government had opened up the defence production industry in 2001 by allowing 100 per cent investment by private sector firms, but allowed FDI only up to 26 per cent. Of late, however, many industry bodies have sought an increase in this limit.
The Associated Chambers of Commerce and Industry of India (Assocham), for instance, recently presented a paper to the Defence Ministry, seeking a hike in the FDI ceiling to 49 per cent to help speed up defence indigenisation using the latest technological transfers. The paper pointed out that the country’s spend on arms imports since the 1999 Kargil conflict has risen to $25 billion and would further rise to $30 billion by 2012.
India is the world’s largest importer of defence articles, as its Services buy over $6 billion worth of military hardware. The Government has set a target for procuring 70 per cent of its defence requirements from indigenous sources by 2010. “It is therefore necessary to move towards self-reliance in defence production, which could be possible if the FDI limit is hiked to 49 per cent,” Assocham feels.
Mr Patrick Boissier, DCNS Group’s Chairman and CEO said, “India is one of the key strategic focus markets for DCNS group and we are looking at it from a very long-term prospective.”
The group offers solutions for development of surface combatants and submarines, besides critical equipment and systems, including underwater weapons and propulsion systems.
DCNS currently holds a contract for the transfer of technology to the Indian Navy for the construction of six Scorpene submarines at the Mazagaon Dock Ltd. “We are confident that the six submarines will be completed within the scheduled time of 2018. The construction of one has started and the second and third are in the pipeline,” Mr Boissier said, adding that the level of indigenisation will increase with every submarine constructed.
DCNS is also providing a comprehensive package and engine/reduction gear cradles for four P28 anti-submarine warfare corvettes built by Garden Reach Shipbuilding.
The group is preparing to participate in the bids for six new submarines that India plans to invite in the next two years. Additionally, DCNS India will conduct detailed engineering studies and provide consultancy, sourcing and procurement services for other DCNS projects with Indian shipyards.
The company, which has been participating in some projects of the Indian Navy, launched its Indian subsidiary, DCNS India, in Mumbai on Wednesday.
“As per Government policy, we cannot hold more than 26 per cent stake in the joint venture (with the Indian partner). But we are open to raise the stake if the (Indian) Government relaxes the FDI cap on defence projects,” Mr Xavier Marchal, DCNS’s Senior Vice-President (India), told Business Line. He said the Indian tie-up was likely to be finalisedwithin a year.
The Indian Government had opened up the defence production industry in 2001 by allowing 100 per cent investment by private sector firms, but allowed FDI only up to 26 per cent. Of late, however, many industry bodies have sought an increase in this limit.
The Associated Chambers of Commerce and Industry of India (Assocham), for instance, recently presented a paper to the Defence Ministry, seeking a hike in the FDI ceiling to 49 per cent to help speed up defence indigenisation using the latest technological transfers. The paper pointed out that the country’s spend on arms imports since the 1999 Kargil conflict has risen to $25 billion and would further rise to $30 billion by 2012.
India is the world’s largest importer of defence articles, as its Services buy over $6 billion worth of military hardware. The Government has set a target for procuring 70 per cent of its defence requirements from indigenous sources by 2010. “It is therefore necessary to move towards self-reliance in defence production, which could be possible if the FDI limit is hiked to 49 per cent,” Assocham feels.
Mr Patrick Boissier, DCNS Group’s Chairman and CEO said, “India is one of the key strategic focus markets for DCNS group and we are looking at it from a very long-term prospective.”
The group offers solutions for development of surface combatants and submarines, besides critical equipment and systems, including underwater weapons and propulsion systems.
DCNS currently holds a contract for the transfer of technology to the Indian Navy for the construction of six Scorpene submarines at the Mazagaon Dock Ltd. “We are confident that the six submarines will be completed within the scheduled time of 2018. The construction of one has started and the second and third are in the pipeline,” Mr Boissier said, adding that the level of indigenisation will increase with every submarine constructed.
DCNS is also providing a comprehensive package and engine/reduction gear cradles for four P28 anti-submarine warfare corvettes built by Garden Reach Shipbuilding.
The group is preparing to participate in the bids for six new submarines that India plans to invite in the next two years. Additionally, DCNS India will conduct detailed engineering studies and provide consultancy, sourcing and procurement services for other DCNS projects with Indian shipyards.