Source: The Hindu Business Line, Nov 06, 2017
New Delhi: India’s $10-billion single-engine fighter jet deal is believed to have hit a stumbling block over the contentious issue of transfer of technology (ToT) and equity participation. This is while negotiations are on for the purchase of more Rafale jets from France.
The two main contenders for the deal — Lockheed Martin and SAAB — have made it clear to the Defence Ministry that they will not go in for a complete transfer of technology (ToT) with 49 per cent equity participation in the joint ventures that they have inked with their respective Indian partners, sources told BusinessLine.
Under the defence foreign direct investment rules, global OEMs can invest more than 49 per cent with prior government approval. However, the fighter-jet deal has to be executed under the new ‘Strategic Partnership’ (SP) policy, and as per the norms laid out in this policy, it is the Indian entity that will have a controlling stake with 51 per cent.