Airbus Helicopters, a part of the Airbus group, on Friday said it will join hands with Mahindra Defence to produce helicopters in India.
Financial details of the deal were not disclosed.
The move is in line with Prime Minister Narendra Modi’s signature Make in India campaign, which aims to encourage domestic manufacturing by cutting red tape and bureaucratic hurdles. India is currently among the world’s largest arms importer.
“The tie-up is in line with our intent to develop an indigenous industrial ecosystem for helicopters. The joint venture will be dedicated to supplying the Indian Armed Forces with made-in-India, state-of-the-art helicopters of high reliability, quality and safety standard based on combat-proven platforms,” said Guillaume Faury, president and CEO, Airbus Helicopters.
The two firms will now engage in discussions to finalise the formation of the joint venture, which will act as the prime contractor for India’s military helicopter tenders, including the reconnaissance and surveillance helicopter, the naval utility helicopter and the naval multirole helicopter procurement programmes.
“We have made substantial investments in aero components manufacturing, while Airbus Helicopters offers best-in-class rotocraft platforms,” said SP Shukla, group president of aerospace and defence sector, and chairman, Mahindra Defence Systems.
According to a report by industry chamber FICCI and financial services company Centrum Capital, India’s total defence budget allocation is at $620 billion from 2014 to 2022, of which 50% will be on capital expenditure. Companies can look at a $41-billion market by 2022, the report released in February said .
Mahindra Group currently produces the Airvan 8, and is also developing a 10-seater turboprop plane in Australia. The company was last month awarded a multi-million dollar aero-components production contract by Airbus Group company Premium AEROTEC.
Under current rules, foreign ownership in joint ventures in defence is limited to 49%.