India to be Italian defence major focus in 2009
Eyeing India whose annual defence spending is expected to touch a whopping USD 10 billion in the next five years, an Italian defence major has announced plans to focus on the subcontinent from next year by forging tie ups with local companies.
"We are extending our presence both commercially and in terms of production to high potential markets and India will be our focus area in the coming years beginning 2009," Finmeccanica's chairman and chief executive officer Pier Francesco Guarguaglini told PTI here.
"Where possible and necessary, we plan to do this largely through local and international partnerships," Guarguaglini said, when asked about the likely 50 per cent offsets clause in India's to-be-announced Defence Procurement Plan-2008.
"By integrating our technological and product excellence with that of other companies, we will be able to increase our commercial opportunities, reduce risks and investments, and speed up time to market our products," he emphasised.
In fact, Finmeccanica has a large presence in India, with nine of the 15 offices and production facilities in Asia alone based in the sub-continent. Whereas, neighbouring China had just three offices and facilities.
"India is certainly a major market for Finmeccanica in the defence and aerospace field, which are our company's two pillars. The third pillar, of course, is defence electronics," Finmeccanica's chief operating officer Giorgio Zappa said.
"We are not in India for any short-term relationships. We are looking at long-term benefits," Zappa added.
Already, Finmeccanica has a major role in the defence and aerospace sector in India in the form of tie-ups with Defence Public Sector Undertakings.
Finmeccanica was working with the Bharat Heavy Electricals Limited (BHEL) in the production of the 76mm guns under licence for some radar parts and in transportation market.
It was also collaborating with Bharat Electronics Limited (BEL) on building of radars for the Air Traffic Control of airports and Defence airbases. Work was also on jointly with bluechip Hindustan Aeronautics Limited (HAL) in the aerospace sector, as also with the Bharat Dynamics Limited (BDL) in the field of torpedoes and laser missiles.
In the private sector, Finmeccanica had signed a memorandum of understanding with Mahindras and discussion for a similar tie-up with Tatas was in progress.
The Italian major was also working on joint ventures to buy out certain companies, all within the limitations and restrictions imposed by the Indian government, according to Finmeccanica's India country head Paola Girasole.
"We are awaiting some relaxation in the foreign direct investment limits of 26 per cent from the Indian government. We are not here only to sell, but also to buy," Girasole said. India is already considering a proposal to increase the FDI limits in the Defence sector to 49 per cent.
Finmeccanica was extending support to the Seaking helicopters and was building Joint Cargo Aircraft (JCA) C27J for the Border Security Force. Incidentally, C27J was also sold to the US last year.
In the future, Finmeccanica was looking at opportunities in India in the form of the maritime patrol aircraft for which it would place its aircraft that were in use with the Italian coast guard at present.