‘Increasing FDI in Indian defence sector will be a welcome move’

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PERISCOPEHELIJune 20;Textron India Private Limited is a wholly owned subsidiary of Textron Inc. It manufactures fixed-wing aircraft as well as helicopters and UAVs. Founded in 1923, Textron has grown into a network of businesses with total revenues of $12.2 billion and approximately 32,000 employees with facilities and presence in 25 countries. In an interview to The Hindu during his recent visit to India, Frank T. Connor, Executive Vice-President and Chief Financial Officer of Textron Inc, talks about the company’s plans in India and bats for Foreign Direct Investment (FDI) in the defence sector. An excerpt from the interview:

What are your views on the Indian commercial helicopter market? What sectors are you targeting?

It’s not very encouraging at the moment. The numbers are declining with not enough infrastructural support available in India. Lack of helipads, trained pilots and a slow economy are affecting the market. Most airports in India are made for fixed-wing aircraft and trained commercial pilots are usually attracted by the airlines. Also, the helicopter market is still evolving. We are waiting for the demand for state police, medical evacuation and reconnaissance helicopters becoming a reality. We are also targeting State governments, ONGC, oil and gas exploration companies, Pawan Hans, corporate houses and pilgrimage tourism.

There is a strong support for increasing FDI in the defence sector both at home and abroad. How do you see the situation unfurling in this matter?

Increasing FDI in the defence sector from the present 26 per cent will be a welcome move. We are here to partner with Indian companies looking for strategic partnerships, joint ventures, etc. From our perspective, if we are sharing technology, we would like to have higher equity than 26 per cent. It is only going to help the Indian industry in indigenisation and modernisation because the foreign original equipment manufacturers (OEMs) will be able to share high-end technology and ready to invest in Indian companies.

How do you perceive defence investment by foreign companies in India given the fact that often uncertainties block the deal, the latest being Finmeccanica’s AgustaWestland VVIP choppers?

I would not like to comment on Finmeccanica but I would like to say from the perspective of the U.S. and Textron that we are here basically for a long term strategic partnership and participate in all Indian defence modernisation programmes.

What it the status of the Sensor Fuzed Weapon (SFW) programme for the Jaguar aircraft?

The integration work has already started at HAL. In late 2012, the Indian Air Force began receiving deliveries of Textron Defense Systems’ SFW for the Jaguar aircraft. The SFW foreign military sale programme was initiated in 2010. We are under contract to provide a total of 512 SFWs. It is a smart air-to-ground area weapon designed to defeat moving and fixed targets on land and at sea. With proven features to prevent hazardous unexploded ordnance, the SFW delivers greater than 99 per cent reliability, verified through operational performance.

For the Bell helicopter, is there any ongoing discussion with the Indian Navy?

Yes, we are in discussion with the Indian Navy but nothing is final till now. We have various products, which can be offered to Indian armed forces depending on the requirement. For example, the 407 armed version, the 429 latest twin engine, the AH-1Z Zulu, the V 22 Osprey and the Bell 525 Relentless (which is currently under production).

Could you elaborate on what Textron is looking from the Indian Crime and Criminal Tracking Network and System (CCTNS) programme?

We are in touch with the paramilitary forces for UAV and unattended ground sensor solutions on IT security. We have a number of modules for all types of requirements. We are looking for partnerships with the State police departments and other agencies for upcoming programs related to homeland security. CCTNS is the programme where all the police stations of India will be connected for tracking crimes and criminals.

What are the areas you are looking at for sourcing from India?

India is a major sourcing partner for us. We are currently producing the body of one of the Bell helicopters with an Indian private industry. We source some parts for our piston engine company called Lycoming, which are critical parts and are cleared by Federal Aviation Administration (FAA). Currently, we are looking at sourcing Bell helicopter cabin assembly in significant numbers from India. Additionally, a programme is on to source some air borne weapon components. We have 525 people in our technology centre in Bangalore, which is the largest technology centre outside North America.

In your view, what policy initiatives should the government take to strengthen the aerospace and defence sector domestically?

I think more liberal industrial policies for letting the Indian industry partner with foreign OEMs and incentivising foreign OEMs to set up manufacturing facilities can contribute in this regard.

India is pegged to be the third largest aviation market by 2020 but currently air travel numbers are going down even after dropping fares. How do you see this situation?

If the infrastructure grows, smaller green field airports and helipads will come up and the aviation sector will grow. All commercial and general aviation business is linked to the economy of the country. If the country’s economy is on track, people will have to move so you need airplanes, helicopters, airports and better highways.

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