In a significant move, Swedish defence major Saab on Tuesday announced that it will set up a manufacturing facility in India for production of its Carl-Gustaf M4 weapon systems.
It will be the company's first manufacturing facility for the Carl-Gustaf M4 outside Sweden.
The production of the shoulder-fired weapons having a range of 1,500 metres will start in 2024, said Gorgen Johansson, Saab's senior vice president.
Almost all the forward posts of the Indian Army along the Line of Actual Control (LAC) with China have been equipped with previous versions of the weapon systems.
Johansson said the facility in India will support the production of the weapon systems for the Indian Armed Forces as well as components for users of the system around the world.
The new company Saab FFV India, currently under registration, will make the latest generation of the state-of-the-art weapon in India, he said at a media briefing, adding Saab will also be partnering with Indian sub-suppliers and the systems manufactured in the facility will fully meet the requirements of 'Make in India' programme.
"It is a natural step to set up a production facility for Carl-Gustaf M4 in India given the long and close association we have with the Indian Army as one of the foremost users of the system," Johansson said.
"We are glad to be able to contribute to the government of India's goals of developing a world class defence industry and proud to offer the Indian Armed Forces our Carl-Gustaf M4 made in India," he added.
The erstwhile Ordnance Factory Board (OFB) was manufacturing Carl-Gustaf M3 with a range of up to 1,200 metres under a tie-up with Saab.
"Manufacturing under that understanding will continue," Johansson said.
He said Saab will continue its partnership with Munitions India Limited (MIL) and Advanced Weapons and Equipment India Limited (AWEIL) to manufacture the Carl-Gustaf weapon and its ammunition.
The MIL and AWEIL were set up after OFB was disbanded.
The Carl-Gustaf system has been in service with the Indian Army since the first cooperation agreement for production in India was signed 1976. Through its wide variety of ammunition, Carl-Gustaf has emerged as a key shoulder-launched weapon in the Indian Armed Forces.
It is learnt that the Indian Army has already conveyed to Saab its requirement of Carl-Gustaf M4 systems.
When asked about the investment in the new venture, Johansson said Saab is looking at the route of 100 per cent foreign direct investment, but if it does not fructify, then the company would plan for 74 per cent FDI.
In case of 74 cent FDI, Saab will require to have an Indian partner.
Asked about the possible Indian partner in case 100 FDI was not granted, the Saab executive said the company has broadly shortlisted certain firms.
In May 2020, the government announced increasing the FDI limit in the defence sector from 49 per cent to 74 per cent under the automatic route.
The government allows 100 per cent FDI for specific cases.
On the location of the production facility, he did not give a direct reply. "We are looking art a number of sites. It will be finalised in due course." Asked about the export of the weapon from the Indian facility, Johansson said the products will first go to Sweden and then it could be sent to various export markets.
The Carl-Gustaf package comprises the weapon, ammunition and related training and support.
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First Published: Sep 27 2022 | 3:13 PM IST