Saab makes history with India's first 100% FDI in defence projects

Sweden's Saab company manage to secure India's first 100% FDI in defence projects

Sweden's Saab become the first company to get 100% FDI approval in India's Defence Projects

• Saab, a Swedish company, has achieved a significant milestone by becoming the first foreign entity to secure 100% FDI in India's defence project.

• The project involves the establishment of a new facility, potentially in Haryana, to manufacture Shoulder-fired rockets. The FDI proposal worth Rs.500 Crore was approved last month, as per the reports.

• India currently permits up to 74% FDI in the defence sector through the automatic route, with clearances available on a case-by-case basis beyond that limit.

• Although the clearance rules were relaxed in 2015, no foreign company had been granted permission for 100% FDI in defence until now.

• In an attempt to develop advanced systems that would enhance the underwater endurance of submarines, French firm DCNS had applied for approval of 100% FDI to establish a subsidiary in India in 2016. The company had sought authorization for an investment of over Rs.100 Crore in DCNS India Pvt. Ltd. to develop crucial defence technologies. However, the necessary permissions were not granted.

• Under this approval, Saab FFV India has been established and is scheduled to commence production next year. The company will manufacture the latest generation Carl-Gustaf M4 systems, marking the first production line of Saab outside Sweden.

Carl-Gustaf M4 systems Use in Armed Forces

• The Indian Armed Forces make extensive use of Shoulder-fired rockets, which are also employed by countries such as the US and European nations to neutralize fortified enemy positions, armored vehicles, and personnel.

• These rockets can be exported once local production begins, which is a testament to the Government's commitment to 'Make in India'.

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