The President, Shri Pranab Mukherjee meeting the Prime Minister of Sweden, Mr. Stefan Lofven, in Stockholm, Sweden on June 1, 2015

The President, Shri Pranab Mukherjee and the Prime Minister of Sweden, Mr. Stefan Lofven, at the delegation level talks, in Stockholm, Sweden

The President, Shri Pranab Mukherjee at a banquet hosted by their Majesties King Carl XVI Gustf, Queen Princess Victoria, His Royal Highness Prince Carl Philip and Ms. Sofia Hellqvist, at Stockholm, in Sweden

Gripen NG

New generation submarin A26

Saab Receives Follow-on Orders for Self-protection Systems for the Indian Dhruv Helicopter

The Swedes are showing their eagerness to mend fences with India. After muddling their fingers in the Indian market in mid eighties, the Swedes have decided to repair their fractured relationship in defence sector with India. The prospective Indian market of US $ 250 billion over the next decade have forced a rethink on reviving their defence and diplomatic relationship with India. Hence the Swedish government invited Indian President Pranab Mukherjee to Sweden in the first week of June and a week later the Swedish defence minister himself visited New Delhi and Bangalore.

The Swedes have an eye on India’s unfinished business of acquiring more fighter squadrons. The IAF will be getting only 36 French Rafale fighters, but rest of the 90 fighters under the 126 MMRCA tender is yet to be completed. Though additional fighters are not to be acquired under the MMRCA tender, the Swedes have offered to set up an entire SAAB production facility in the State of Maharasthra, for which Maharashtra government is already looking for land. The Maharashtra Chief Minister Devendra Phadnavis had said earlier that his government was in talks with the Swedish company SAAB to set up a production facility in the State.

The Swedish defence minister Mr Peter Hultqvist met the Indian defence Minister Manohar Parrikar on 10th June and discussed in length the various investment proposals by the Swedish defence companies. The Swedes are not new to Indian defence market. After the meeting between Swedish defence minister Hultqvist and Indian defence minister Manohar Parrikar, the defence ministry issued a short press release stating that both sides discussed issues of mutual interests concerning bilateral defence cooperation and regional security scenario. Both sides exchanged views on rising scourge of terrorism and agreed to co-operate in this regard. The issue of cooperation of Swedish firms in defence manufacturing under the Make in India initiative was also discussed by both sides. They also agreed to continue to explore opportunities between defence establishments of both sides in mutually agreed areas.

The Swedish defence minister also went to Bangalore where he visited Hindustan Aeronautics and Bharat Electronics facilities. Though SAAB lost out in the six fighter race for Indian MMRCA tender, it never lost hope and continued to discuss with Indian defence officials on the possibility of setting up a production facility in India. SAAB has already presented a business plan with transfer of technology if Indian government provides land, water and other necessary facilities on priority basis. Maharashtra government is reported to have promised to the Swedish company that once a decision was made on setting up Gripen fighter plane manufacturing facility in Maharashtra, the State Government will expedite the process. The State Chief Minister had tweeted after visiting the SAAB facility in Sweden, "It was great to be at the aerospace and defense company SAAB at Linkoping, Sweden. Promised a defence manufacturing policy in Maharashtra soon”. Defence Minister Parrikar had also informed Parliament in March this year that the LCA's parameters were better than foreign competitors in terms of thrust and speed. The one aircraft that scored better was the Swedish Gripen, although it costs much more, he said.

The Chairman of SAAB India Lars-olof Lindgren had also told a defence website that he has a “Make in India” plan for the Gripen. Since Indian Air Force needs 42 squadrons and presently has only 34 squadrons with half of them obsolete MiG series aircrafts, the IAF urgently needs to acquire more squadrons to fill the widening gap in squadron strength. Since Indian developed LCA is nowhere near the horizon, the IAF has told the MOD that government must plan an early replacement of MiG series aircrafts. The IAF is not satisfied with LCA Mark-1 and has asked the HAL to produce the LCA Mark-2 having new advanced engines with better thrust capability, but LCA Mark-2 is not expected to roll out before 2021-22. The Fifth Generation Russian fighter also looks to be beyond the horizon. The two sides haven’t yet inked the final production schedule.

Hence, the IAF has advised the MOD to look for an easier option. The Gripen fighters can be acquired in large numbers as it has been billed as the cheapest option with proven technology. Only 36 Rafales will not fill the widening gap in the fighter strength of Indian Air Force. Hence MOD had invited, earlier this year SAAB and Rosoboronexport to offer their proposals on the purchase of a light fighter to replace the MiG-21s.

Interestingly SAAB is also eyeing the Rs. 50,000 crores Indian navy requirement for six submarines. SAAB has showcased its new generation submarine A-26 at IMDEX Asia in Singapore from May 19-21. SAAB has also specialized in a range of defence products including systems and solutions, which they are also offering to Indian armed forces. SAAB is also looking for partners in India for manufacturing them in Indian Shipyard, according to Indian MOD Make in India policy. The A-26 Submarine was the star attraction in the International Maritime Defence Exhibition and Conference at Singapore this year. This submarine is equipped with AIP technology which will enable the warship to remain submerged in water for 18 days.

SAAB has already signed a Technical Partnership (TCA) agreement with the Pipavav, private sector shipyard, which has been declared qualified by the Indian navy as a Combat Management System (CMS) to modernize or replace warships. The TCA signed in August, 2012 will continue an ongoing co-operation between the two and also covers details about the format for cooperation and relevant projects. SAAB has thus crafted a long term strategy to engage with the Indian armed forces. The two companies have also formed the Combat Systems Engineering Group, which analyses naval combat systems design and architecture. They are also exploring the next generation combat management system for the Indian navy.

Two years ago SAAB was awarded a 1900 crore order from India to supply self protection systems for Dhruv Advanced Light Helicopter. The order was placed by Hindustan Aeronautics Ltd for the Indian Air Force. In March this year SAAB has also entered into a partnership agreement with Reliance Defence of India for producing advanced systems for Indian armed forces. Reliance wants to bid for the ship-borne UAV program of the Indian Navy, valued around 10 billion. This agreement will allow European defence manufacturer to enter the emerging Indian UAV market, which is dominated by the Israeli companies.

Sweden thus has a very ambitious plan to widen its footprint in Indian defence market and the Swedish Defence Minister has accordingly discussed these issues in detail with Indian defence minister and has also invited Mr Parrikar to visit Sweden to have a glimpse of the capabilities of the Swedish defence manufacturing facilities.