By N. C. Bipindra
New Delhi: Sweden’s Saab announced today that it is setting up a production facility in India for its legendary Carl-Gustaf shoulder-fired recoilless rifle’s latest variant through the 100 percent Foreign Direct Investment route.
The Swedish defence firm’s senior officials said they were hopeful of meeting the entire need of Indian armed forces for the M4 variant of the Carl-Gustaf and export the additionally manufactured weapon system to meet the future needs of nearly 40 other nations.
The ground-breaking ceremony for the manufacturing facility took place at Jhajjar in Haryana following the setting up of the 100% Saab-owned subsidiary Saab FFVO India Private Limited.
“Today is an important milestone for Sweden and India. Saab’s factory will be the first foreign fully owned defence production facility in India. It is a testament to the strong bilateral relationship between our countries,” Sweden’s State Secretary for Foreign Trade Håkan Jevrell, who also met with India’s Defence Secretary Giridhar Aramane, said.
“This is the first-ever defence company to have 100 percent FDI in India. We have taken the first step to set up the manufacturing facility today,” Saab’s senior vice president and Business Area Dynamics head Gorgen Johansson told a select group of journalists today.
Apart from producing the M4 variant of the Carl-Gustaf, a small number of which Indian armed forces are already using, the new facility would also produce components for the world market, Johansson said.
“The production from this facility will roll out from next year. We are also partnering with Indian suppliers to produce this weapon system in India,” he said.
India is among the most significant Carl-Gustaf users and the most extended user of the weapon system. The new facility at Jhajjar would come up on 3.6 acres of land and would recruit around 100 locals to work at the factory there.
Saab took more than two years to obtain its approval for setting up a 100 percent subsidiary in India based on its proposal to bring in the latest technology for the M4 variant of Carl-Gustaf. “Since we made the application, it took only about six months for the government approval,” Johansson said. “It is not so easy to undertake 100% FDI in the Indian system.”
India permits 100 percent FDI in the defence sector, provided the latest, advanced technology is infused into the country’s military industrial complex through government approval. The FDI policy allows 76 percent investment by a foreign company through the automatic route, introduced in 2020.
Saab hopes to export the M4s produced at its Indian facility to Sweden first and then supply them to its customers globally, with explicit approvals from the Indian government regarding the end-users.
“We are going to make it truly made-in-India. This is a complex technology, and we would be manufacturing it the same way we do it in Sweden.”
The Saab officials said the new 100 percent subsidiary it has floated in India would be considered on par with other Indian companies while considering its products for procurement for the Indian armed forces. “Otherwise, we would not have done it. We wouldn’t have done it based on some speculation (uncertainties over the company’s Indian status),” one of the Saab officials said.
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