More FDI in the military sector is made possible by Saab's Rs 500-cr rocket manufacturing plan

 More FDI in the military sector is made possible by Saab's Rs 500-cr rocket manufacturing plan

The Swedish defense producer wants to establish stronger ties in the Indian defense sector by aiming to acquire 100% control in certain regions.

The Swedish defense manufacturer Saab has the potential to boost India's national security capabilities by becoming a crucial component of the nation's defense ecosystem.

The Swedish defense corporation Saab received a major boost to its plans to establish a rocket manufacturing facility in India and begin production in 2024 when New Delhi approved 100% foreign direct investment (FDI) in the defense industry. In October, the less than Rs 500 crore FDI request was approved.

India now permits 74 percent of foreign direct investment (FDI) in the defense industry via the automatic route; approvals for more investment are granted on an individual basis.

The approval of 100% FDI is a noteworthy move that demonstrates the nation's readiness to draw in outside capital and experience to strengthen its defense manufacturing capacities and facilitate technology transfer. Furthermore, the action may result in more cooperation and partnerships with international defense firms, which would further the modernization of India's defense sector.

Saab demonstrated its desire to support regional manufacturing and cooperation by demonstrating its dedication to Made-in-India and by continuing to work with Indian firms like Munitions India Limited (MIL) and Advanced Weapons and Equipment India Limited (AWEIL).

Furthermore, it backs India's endeavors to strengthen its defense manufacturing capacities. Saab may become a vital component of India's defense ecosystem and help to bolster the nation's national security capabilities by producing essential parts and goods there.

In a previous interview with CNBC TV 18, Saab revealed its long-term goals to become an Indian business and reaffirmed its support for the "Make in India" campaign as a long-term, strategic approach to its operations in the nation. The Swedish defense giant views India as one of the most significant markets in the world and is attempting to establish stronger ties with the Indian defense sector by attempting to acquire 100% control in certain regions.

In reality, the creation of Saab FFV India to produce the most recent Carl-Gustaf M4 system in India is a huge step forward for the military industry in both India and Saab. The facility will be essential to developing the nation's military production capabilities and is anticipated to be situated in Haryana.

The healthy demand for Saab's goods and services is evident in the company's outstanding performance in the third quarter, which saw a 51 percent rise in operating profit to $76.9 million from a year earlier and a 31 percent gain in organic sales.