Raytheon bets big on Indian defence business
Raytheon inks pacts with L and T, Wipro, BEL, Godrej and Boyce and Data Patterns India to tap the growing defence business. How to open business in India?
By TNN |
MUMBAI: Five Indian defence equipment makers and technology providers, Larsen & Toubro (L&T), Wipro, Bharat Electronics (BEL), Godrej & Boyce and Data Patterns India have struck an alliance with the world’s fifth-largest defence contractor, Raytheon.
“The company has signed memorandum of understanding with Larsen & Toubro (L&T), Wipro, Bharat Electronics, Godrej & Boyce and Data Patterns India in the past few days. These strategic alignments make good business sense for Raytheon and India,” Wes Motooka, Raytheon’s vice-president for international strategy and business development, was quoted as saying on Thursday by the international media.
The $20-billion US defence major’s tie-ups with the Indian companies — which are shortlisted for Raksha Udyog Ratnas (RURs) status — are part of the move to tap the growing Indian defence business, according to defence experts.
A clause in the defence contract stipulates that foreign firms bidding for defence projects valued at Rs 300 crore or more have to source at least 30% worth of equipment of the contract from Indian companies with an RUR status, a defence expert said. In turn, the tie-ups will open up ample business opportunities for Indian companies. The government intends to save huge foreign exchange through reduced defence import.
At least 12 companies, including Tata Power, L&T, Wipro and Godrej & Boyce, have been short-listed for
RUR status. Once awarded, these companies will be treated on par with defence public sector enterprises and will be allowed to access foreign technologies, enter into collaborations with overseas players and avail up to 26% foreign direct investment.
“Raytheon’s tie-up with L&T would be in avionics, especially in developing radar systems,” said L&T sources. Wipro insiders said Raytheon’s tie-up with Wipro would be for developing communication technology, embedded software and system design. “Godrej & Boyce and BEL may collaborate in machinery and equipment engineering. Data Patterns would jointly develop electronic products for defence and aerospace,” said people in the know.
After Washington lifted sanctions against India in 2001, the first defence contract between the two countries was meant for 12 Raytheon firefinder ground weapon-locating radars. Out of India’s budgeted expenditure of
Rs 6,80,521 crore for 2007-08, Rs 96,000 crore was earmarked for the defence sector.
“The company has signed memorandum of understanding with Larsen & Toubro (L&T), Wipro, Bharat Electronics, Godrej & Boyce and Data Patterns India in the past few days. These strategic alignments make good business sense for Raytheon and India,” Wes Motooka, Raytheon’s vice-president for international strategy and business development, was quoted as saying on Thursday by the international media.
The $20-billion US defence major’s tie-ups with the Indian companies — which are shortlisted for Raksha Udyog Ratnas (RURs) status — are part of the move to tap the growing Indian defence business, according to defence experts.
A clause in the defence contract stipulates that foreign firms bidding for defence projects valued at Rs 300 crore or more have to source at least 30% worth of equipment of the contract from Indian companies with an RUR status, a defence expert said. In turn, the tie-ups will open up ample business opportunities for Indian companies. The government intends to save huge foreign exchange through reduced defence import.
At least 12 companies, including Tata Power, L&T, Wipro and Godrej & Boyce, have been short-listed for
RUR status. Once awarded, these companies will be treated on par with defence public sector enterprises and will be allowed to access foreign technologies, enter into collaborations with overseas players and avail up to 26% foreign direct investment.
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Mr Motooka has said the latest agreements will help it develop electronic warfare systems, radar, naval systems, tank electronics and a range of support systems. Raytheon is already working closely with the Strategic Electronics Division of Tata Power Company following an MoU in February this year. “Raytheon’s tie-up with L&T would be in avionics, especially in developing radar systems,” said L&T sources. Wipro insiders said Raytheon’s tie-up with Wipro would be for developing communication technology, embedded software and system design. “Godrej & Boyce and BEL may collaborate in machinery and equipment engineering. Data Patterns would jointly develop electronic products for defence and aerospace,” said people in the know.
After Washington lifted sanctions against India in 2001, the first defence contract between the two countries was meant for 12 Raytheon firefinder ground weapon-locating radars. Out of India’s budgeted expenditure of
Rs 6,80,521 crore for 2007-08, Rs 96,000 crore was earmarked for the defence sector.
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