India to be Italian defence major's focus in 2009

N C Bipindra

Farnborough (UK), July 20 (PTI) 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 percent
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 (B.H.E.L.) 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 (B.E.L.) on building of radars for the Air Traffic
Control of airports and Defence airbases. Work was also on
jointly with bluechip Hindustan Aeronautics Limited (H.A.L.)
in the aerospace sector, as also with the Bharat Dynamics
Limited (B.D.L.) 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 percent 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 percent.

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.