Saab's becomes first foreign defence company to get Indian govt nod for 100pc FDI

In a landmark development, Swedish defence giant Saab has achieved a significant milestone by becoming the first foreign company to secure 100 per centForeign Direct Investment (FDI) approval for a defence project in India. According to The Economic Times, Saab has been given the green light to establish a new manufacturing facility in India, which will focus on producing shoulder-fired rockets.

This approval comes at a time when India has been gradually opening up its defence sector to foreign investment.

India allows only up to 74 per centFDI in the defence sector under the automatic route, with additional clearance available on a case-by-case basis.

Add WION as a Preferred Source

The investment rules were relaxed in 2015, but no foreign company could secure permission for 100 per centFDI in the defence sector until now.

As part of this strategic move, Saab has established a subsidiary, Saab FFV India, which will be responsible for manufacturing the latest generation of the Carl-Gustaf M4 system.

This marks the first time Saab will manufacture the Carl-Gustaf M4 system outside of Sweden. The new facility is expected to be in Haryana, India.

The Carl-Gustaf M4 system, known for its versatility and effectiveness, is a shoulder-fired rocket launcher extensively used by the Indian armed forces. It is also employed by countries such as the United States and various European nations to neutralize fortified enemy positions, armoured vehicles, and personnel.

The significance of this development extends beyond just foreign investment. It showcases India's growing ambition to access modern defence technology through foreign collaborations, ultimately enhancing its defence capabilities.

In a statement, Mats Palmberg, Chairman, and Managing Director of Saab India, expressed his pride, saying, "We are proud to be the first global defense company to be approved by the Indian government for 100 per centforeign direct investment for our new Carl-Gustaf manufacturing facility in India. This is another step in Saab's commitment to 'Make in India,' and we look forward to continuing our collaboration with our Indian partners and supporting the Indian armed forces with the production of Carl-Gustaf in India."

The move also signals a shift in India's defence industry's attraction to foreign investment.

In the April-September period of the fiscal year 2023, India received a foreign direct investment worth $3.21 million in defence industries. This is a notable increase compared to $2.36 million in 2021-22, indicating that India's defence sector is increasingly seen as a promising destination for foreign investors.

WATCH WION LIVE HERE