India has marked a historic milestone by approving the first 100% Foreign Direct Investment (FDI) in the defence sector. The green light has been given to Sweden's Saab, enabling them to establish a cutting-edge facility dedicated to manufacturing shoulder-fired Carl-Gustaf rockets.
“Saab will be partnering with Indian sub-suppliers and the systems manufactured at the facility will fully meet the requirements of “Make in India,” the company said in a statement.
The statement further added that Saab’s Carl-Gustaf system has been in service with the Indian Army since 1976 and is established as the main shoulder launched weapon in the Indian Armed Forces.
Commenting on the deal, Görgen Johansson, head of Saab’s business area Dynamics, said: “It is a great honour to be trusted as a global defence company to receive approval for 100% foreign direct investment in India. This underlines our strong commitment to Make in India and our excellent collaboration with the Indian Defence Forces.”
While India currently permits up to 74% FDI in the defence sector through the automatic route, securing permission for 100% FDI has been an unprecedented achievement.
Saab's venture, Saab FFV India, is set to play a pivotal role in producing the latest generation of the Carl-Gustaf M4 system. The facility, likely to be situated in Haryana, will incorporate advanced technologies such as state-of-the-art sighting tech and carbon fiber winding for the Carl-Gustaf system. These shoulder-fired rockets are already extensively utilized by the Indian armed forces.
This initiative signifies Saab's inaugural Carl-Gustaf M4 production line outside Sweden, slated to commence manufacturing next year. The Carl-Gustaf system, a shoulder-launched weapon in use by the US, European, and Indian armed forces, proves instrumental in neutralizing fortified enemy positions, armor, and personnel.
It's noteworthy that in 2016, DCNS, a French firm, had sought approval for 100% FDI to establish an Indian subsidiary focused on developing advanced systems to enhance submarine underwater endurance. Although the proposal, valued at over ₹100 crore, did not secure the necessary permissions, it reflects a growing trend in India's openness to foreign investment in defence.
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