Sweden, India agree to strengthen cooperation on defence

STOCKHOLM (Reuters) - Sweden and India will strengthen their cooperation on defence, their prime ministers said on Tuesday, a move that could aid Sweden's Saab in its bid to sell its Gripen jet to replace India's Soviet-era MiG fighters.

Last week, India issued a request for information for 110 combat jets for the air force, marking the first step toward a long-delayed deal that could be worth more than $15 billion.

"Sweden and India have agreed to work towards a security agreement allowing us to exchange certain types of classified information required to work together on defence materials," Swedish Prime Minister Stefan Lofven told reporters after meeting his Indian counterpart in Stockholm.

"This agreement would be an important step forward to deepen our bilateral cooperation in the defence domain."

Lockheed Martin, Saab and Dassault Aviation are among the manufacturers expected to compete for India's fighter order. The planes must be largely built locally as part of Prime Minister Narendra Modi's make-in-India drive to build a domestic industrial base.

"In the area of defence, Sweden has been a partner of India for a very long time and I am sure that in the future as well, we will find more opportunities for cooperation, in particular in the area of defence production," Modi told reporters.

Saab had agreed to work with India's Adani Group in a bid to sell single-engine planes to the air force, but India has since widened the brief to both single and twin-engined planes.

The two countries also agreed to cooperate on renewable energy, urban transport and waste management.

(Reporting by Simon Johnson and Niklas Pollard, editing by Larry King)