<p>European aviation and space major Airbus on Monday said the 49% limit on foreign direct investment in military projects would not bring the best foreign vendors to India under the Make in India scheme.<br /><br /></p>.<p>With the 49% FDI ceiling, it would not be easy to get the original equipment manufacturer of quality. “You may get a few but not the right ones,” Pierre de Bausset, President and Managing director of Airbus Group India, said here.<br /><br />Bausset said if an original equipment manufacturer (OEM) was bringing in investment or a product that is part of their own product-line worldwide, the company would like to have some control over it.<br /><br />“Forty nine per cent is not a good limit as it is at odds with the government’s stated policy. But we are faced with a moving environment,” he added.<br /><br />Airbus is the first big firm that expressed doubts on the practicality of the 49% ceiling, though other defence companies too dropped hints against the increase in the limit.<br /><br />The ceiling was expanded to 49% in 2014 after the NDA government came to power from 26%, which was the limit set by the previous regime. Owing to red tape, several Airbus projects including A330 multi-role tanker transport and C295W transport aircraft have been stuck for years.<br /><br />The MRTT project has been stuck for 10 years as the tender was first floated in 2006. Three years later, the A330 platform was chosen, but the government cancelled the tender citing high cost. In January 2013, the same platform was again selected through a new tender.<br /><br />“The acquisition stagnated at the contract negotiation stage. We are awaiting for guidance from the defence ministry,” said Venkat Katkuri, President of Airbus Defence and Space division.<br /><br />Airbus officials say the company is on course to match its $ 2 billion procurement target by 2020, which doesn’t include defence deals. The firm can invest Rs 5,000 crore in India to start assembly lines for C295 aircraft and Panther helicopters once they get the orders from the government.<br /><br />Last May, the Defence Ministry cleared the lone bid of Airbus-Tata consortium for replacing Avro transport aircraft fleet with C295 platform at a price of Rs 11,930 crore.</p>
<p>European aviation and space major Airbus on Monday said the 49% limit on foreign direct investment in military projects would not bring the best foreign vendors to India under the Make in India scheme.<br /><br /></p>.<p>With the 49% FDI ceiling, it would not be easy to get the original equipment manufacturer of quality. “You may get a few but not the right ones,” Pierre de Bausset, President and Managing director of Airbus Group India, said here.<br /><br />Bausset said if an original equipment manufacturer (OEM) was bringing in investment or a product that is part of their own product-line worldwide, the company would like to have some control over it.<br /><br />“Forty nine per cent is not a good limit as it is at odds with the government’s stated policy. But we are faced with a moving environment,” he added.<br /><br />Airbus is the first big firm that expressed doubts on the practicality of the 49% ceiling, though other defence companies too dropped hints against the increase in the limit.<br /><br />The ceiling was expanded to 49% in 2014 after the NDA government came to power from 26%, which was the limit set by the previous regime. Owing to red tape, several Airbus projects including A330 multi-role tanker transport and C295W transport aircraft have been stuck for years.<br /><br />The MRTT project has been stuck for 10 years as the tender was first floated in 2006. Three years later, the A330 platform was chosen, but the government cancelled the tender citing high cost. In January 2013, the same platform was again selected through a new tender.<br /><br />“The acquisition stagnated at the contract negotiation stage. We are awaiting for guidance from the defence ministry,” said Venkat Katkuri, President of Airbus Defence and Space division.<br /><br />Airbus officials say the company is on course to match its $ 2 billion procurement target by 2020, which doesn’t include defence deals. The firm can invest Rs 5,000 crore in India to start assembly lines for C295 aircraft and Panther helicopters once they get the orders from the government.<br /><br />Last May, the Defence Ministry cleared the lone bid of Airbus-Tata consortium for replacing Avro transport aircraft fleet with C295 platform at a price of Rs 11,930 crore.</p>
