US defence firms ready to make in India, but won’t part with technology

19 Sep 2017


US defence companies Lokheed Martin and Boeing have offered to supply combat aircraft to India as per the `Make-in-India' programme but will not part with any proprietary technology under the partnership agreement with any Indian firm, reports quoting a communication by a US lobby group to India's defence minister said.

Lokheed martin was earlier reported to have offered to shift the entire production line of its F-16 aircraft to India, but the company will, however, keep all related technology with itself, according to the latest report.

At the same time, these companies say they shouldn't be held liable for defects in products manufactured in collaboration with local partners under Prime Minister Narendra Modi's Make in India's drive.

Lockheed had offered to shift its F-16 production line to India from Fort Worth, Texas, and make it the sole factory worldwide if India orders at least 100 single-engine fighters.

The US firm had also picked Tata Advanced Systems as its local partner under the defence ministry's new strategic partnership model, under which foreign original equipment manufacturers (OEMs) can hold up to a 49 per cent stake in a joint venture with an Indian private firm which will hold the majority stake.

The US-India Business Council (USIBC) last month wrote to India's defense minister seeking a guarantee that US firms would retain control over sensitive technology - even as joint venture junior partners.

''Control of proprietary technologies is a major consideration for all companies exploring public and private defense partnerships,'' the business lobby, which represents 400 firms, said in the Aug. 3 letter, reviewed by Reuters and previously unreported.

''To allow foreign OEMs to provide the most advanced technologies, the partnership arrangement between an Indian owned 'strategic partner' company and a foreign OEM needs to provide an opportunity for the foreign OEM to retain control over its proprietary technology,'' it said, noting this wasn't explicit in the policy document.

The USIBC also objected to a clause in the new rules that held foreign firms jointly responsible for the quality of the final product, saying legal liability is a significant factor in business decisions.

''We recommend the MoD (ministry of defence) affirm that foreign OEMs will not be liable for defects outside their company's control,'' the USIBC said.

Both Lockheed Martin and Boeing are bidding to supply combat jets to the Indian Air Force which need hundreds of aircraft to replace its Soviet-era MiG planes.

At present, only state-run Hindustan Aeronautics Ltd had made planes under licence, while some private players were starting from scratch, having never built even an aircraft component.

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