HELSINKI — Sweden is pursuing an ambitious "government-to-government" multibillion dollar (US) project to sell Saab’s Gripen-NG fighter to India.
The Gripen-NG was tentatively offered to India during meetings between senior Swedish and Indian government officials in Mumbai on Feb. 14-15. Saab was a participant in at least one of the meetings.
Saab was part of a Swedish government-sponsored, high-powered trade group that comprised many of Sweden’s leading industrial corporations, including Ericsson, Volvo, ABB, Scania and BAE Systems Hägglunds AB.
The intergovernmental talks culminated with a joint commitment signed by Sweden’s Prime Minister Stefan Löfven and India’s Prime Minister Narendra Modi to "enhance dialogue" on defense in key areas such as aviation, air-defense, maritime security, combat training and simulation in the army domain.
"There is a general consensus that India wants to strengthen its defense capability. While the country will need to purchase, there is a strong confidence here in the capability of Sweden’s defense industry. We did not conduct any concrete discussions on business deals, but we do see a great opportunity here for Sweden’s defense industry in its entirety and Gripen is a very strong project. We naturally intend to continue talks," said Löfven.
Saab has made no secret of its desire to sell its next-generation fighter to India, including a naval version of the Gripen-E, which is engaged in a capital intensive, large-scale modernization of its armed forces. Included in this overall plan will be the acquisition of between 100 to 400 combat jets.
The Swedish push for a Gripen-NG deal with India comes in the wake of an intergovernmental agreement between France and India in January that paves the way for the conclusion of a contract covering the sale of 36 Rafale fighters to the Indian Air Force (IAF).
"The Swedish view is that there is room for more than one supplier of fighter aircraft to India. It would seem that initial talks with India raised the prospect that a formal offer could be structured on terms that mirror Saab’s $4.68 billion fighter deal with Brazil," said Henk Roetert, a Berlin-based political analyst.
Fundamentally, Sweden’s "government-to-government" deal negotiating approach places any Gripen-NG contract within the scope of a much broader industrial-investment agreement with India, Roetert said.
"A deal on Gripen would invariably combine a very high level of technology transfer, building local factory facilities to produce aircraft, and commitments on partnership driven investments," Roetert said. "The government-to-government approach is certain to involve a broad multi-billion dollar (US) offering of strategic investments by large Swedish industrial companies in non-defense sectors like telecommunications, engineering, transport and power generation."
The Swedish government’s backing for the Gripen project, and its presence in India, will be pivotal in the process of a successful offering of the multi-role fighter to the IAF, said Håkan Buskhe, Saab’s CEO.
"This has been a very successful visit. That our prime minister has been on the front page of every newspaper in India should not be underestimated. This has created a significant impact for us," Bushke said. "We will now move forward to concretize our offer. Where this will lead we must wait and see, but the interest is quite clear."
Buskhe, along with group chairman Marcus Wallenberg, led the Saab industrial team that accompanied the Swedish government’s industrial-trade group to Mumbai.
Saab has formulated a blueprint plan for the IAF that is designed to meet all aspects of India’s ambitions in the general domain of air-defense systems and capability for the next 100 years, Bushke said.
Löfven has promised to intensify bilateral trade and industrial contacts with India in support of Saab’s pending Gripen-NG offer. As part of the government-to-government negotiations process, IAF pilots are set to test fly the Gripen-NG in Sweden later this year.
"Sweden’s strategy will be strongly influenced by the Indian government’s 'Make in India' Initiative," said Löfven.
The Swedish Cabinet’s defense-led, government-to-government talks form a central part of Prime Minister Löfven’s national economic growth plan to use international partnerships to drive industrial expansion and jobs creation in the domestic market.
Based on exports in 2014 and 2015, Sweden’s trade with India is expected to expand to over US $2.5 billion by 2020. A defense-industrial agreement on the Gripen-NG, linked to a Swedish-run multi-sector industrial investment program in India, could see trade levels rise significantly.
According to Sweden’s Department of Trade, the estimated 160 Swedish companies operating in India employ around 150,000 workers directly and another 600,000 indirectly.
"This Swedish government will work hard for a deal," said Allan Widman, chairman of Sweden’s Parliamentary Defense Committee. "Success in India will mean important investment and jobs in Sweden too. Growing the export potential of the defense industry is firmly on the political agenda. Saab will have all the state support it requires to help it sell the Gripen to India."
Saab’s offer package to India is certain to not just include 100 percent technology transfer, but also a firm commitment to develop, produce and undertake the final assembly of the Gripen-NG in India.
The Gripen-version offered to India, as is the case with Brazil, would be based on technologies used in the Gripen-E multi-role jet.
In addition to the Gripen-NG, Saab is also hoping to leverage government-to-government negotiations to sell a range of other defense products to India; including advanced surveillance, battle management, electronic warfare and ground combat systems, as well as naval and coast guard systems.
To advance its cause, Saab plans to strengthen its industrial partnerships in India. This expanding cooperation pool includes Pipavav Defence, Bharat Electronics, Indianeye Security, Hindustan Aeronautics, Kalyani Strategic Systems and Ashok Leyland.
In Europe, Saab has identified Finland’s and Belgium’s fighter replacement programs as those offering the highest potential in terms of success. Belgium is replacing its Lockheed Martin F16A/B aircraft, and Finland its entire fleet of F/A-18 Hornets.
Saab’s Gripen-NG is one of five candidate aircraft in the Belgian fighter replacement program, along with Boeing's F/A-18E Super Hornet, the Dassault Rafale, the Eurofighter Typhoon and Lockheed Martin's F-35-Lightning II.