Thursday, June 23, 2011

Italian firm favours government route for military sale

Seeking to increase its share in the growing Indian defence spending, Finmeccanica, an Italian conglomerate, hopes that Italy could sell military and other equipment to India through the government instead of through the current commercial engagement. Stressing on the need for exploring the option, the country head of Finmeccanica in India, Paolo Girasole, told a group of Indian trade delegation to the Paris Airshow that this would give Italy the same advantages as those enjoyed by the U.S. and Russia. 

 There has been criticism over India's decision to purchase military wares from the U.S. through the Foreign Military Sales (government to government) route, which avoids competition. However, speaking separately to The Hindu, Union Minister of State for Defence M.M. Pallam Raju said the government did not favour the Foreign Military Sales route unless it was absolutely necessary. Mr. Raju, who led the Indian delegation to the airshow at Le Bourget, said the event helped India clarify a few issues in the ongoing procurement with top representatives of the manufacturers, besides analysing the latest products on display. 

 Mr. Girasole said Finmeccanica India grossed orders worth €250 million (approximately Rs.1,700 crore) in India between 2005 and 2009, while in 2010, the orders stood at €768 million (approximately Rs.4,000 crore), including the one for 12 AgustaWestland helicopters. The company, he said, was trying to exploit research and development opportunities with the Defence Research and Development Organisation and was planning to increase its orders which now totalled € 8.5 billion, by adding another €2.5 billion by 2014.

 The company has an interest in Eurofighter, which is in the race for the Rs.45,000-crore Medium Multi-Role Combat Aircraft deal. Through its subsidiary of Alenia Aeronautica, Finmeccanica has a stake in Eurofighter GmbH, which makes Eurofighter. It has formed a joint venture with Tata Sons to assemble the Rotorcraft AW119Ke helicopter in India from December this year. The company collaborates with Bharat Electronics in military ATC radar through Selex Integrati.


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