India defers decision on AW119 joint venture

[Sea Eagle]

Indian authorities have again suspended judgement on a proposal by Indian Rotorcraft Limited (IRL) - a joint venture (JV) between Agusta Westland and Tata - to manufacture upgraded AW119 reconnaissance and surveillance helicopters in India.
A notice published by the Indian Foreign Investment Promotion Board (FIPB) on 20 May said it had deferred a decision on IRL's proposal until a later date. The delay marks the latest in a series of FIPB deferrals over the past few months in relation to IRL's bid to produce the newer AW119Kx model at its Hyderabad facilities in place of the discontinued AW119Ke.
The FIPB originally approved IRL's proposal in September 2013, but the agency came under political pressure to investigate its decision in light of bribery allegations against Agusta Westland in a separate 2010 contract to supply the Indian Air Force with AW101 VIP helicopters.

India defers decision on AW119 joint venture - IHS Jane's 360

 

[Twinblade]

Why in the world do two private corporations need government approval to do business ? Is the FIPB really 'promoting' foreign investment this way ?

 

[pmaitra]

Why in the world do two private corporations need government approval to do business ? Is the FIPB really 'promoting' foreign investment this way ?

In principle, I agree.

There are two issues:

• Considering Augusta-Westland is based out of EU, (UK and Italy), and their obsession with dictating terms at other countries (including sanctions), it is best to keep them in the waiting line. Personally, I don't have a problem dealing with the French, Italians, and Germans. It is the UK part that India needs to be careful about.
• Many Indian private companies try to avoid getting the critical knowhow, and tend to outsource part of their contract to third parties. As long as Tata makes sure it acquires enough technological knowledge to be able to build helicopters of their own without imports, I think such alliances should be encouraged and also patronized. I am saying this in the light of alleged non-deliverance of ToT about the BrahMos engines.

 

[Twinblade]

In principle, I agree.

There are two issues:

• Many Indian private companies try to avoid getting the critical knowhow, and tend to outsource part of their contract to third parties. As long as Tata makes sure it acquires enough technological knowledge to be able to build helicopters of their own without imports, I think such alliances should be encouraged and also patronized. I am saying this in the light of alleged non-deliverance of ToT about the BrahMos engines.

The thing is, this deal is separate from the 197 LUH procurement. Both Kamov and Eurocopter have made arrangements beforehand to manufacture their light helicopters in India without even any decision on LUH tender for Army and Air Force. According to the tender the helicopters would be manufactured by HAL, hence the deal between Tata and AW is irrelevant as far as government procurement is concerned. This is a free business deal that has zero implications on Indian defence procurement and large implications on private Indian aerospace industry. The FIPB is a joke. They banned Mahindra Rafael jv despite it having no implications on government procurement. When the government blacklists a contractor or vendor, they blacklist it from dealing with government organisations, they don't blacklist it's private dealings.

 

[pmaitra]

The thing is, this deal is separate from the 197 LUH procurement. Both Kamov and Eurocopter have made arrangements beforehand to manufacture their light helicopters in India without even any decision on LUH tender for Army and Air Force. According to the tender the helicopters would be manufactured by HAL, hence the deal between Tata and AW is irrelevant as far as government procurement is concerned. This is a free business deal that has zero implications on Indian defence procurement and large implications on private Indian aerospace industry. The FIPB is a joke. They banned Mahindra Rafael jv despite it having no implications on government procurement. When the government blacklists a contractor or vendor, they blacklist it from dealing with government organisations, they don't blacklist it's private dealings.

I think I missed that there was a bribery accusation against AW.

Indian authorities have again suspended judgement on a proposal by Indian Rotorcraft Limited (IRL) - a joint venture (JV) between Agusta Westland and Tata - to manufacture upgraded AW119 reconnaissance and surveillance helicopters in India.
A notice published by the Indian Foreign Investment Promotion Board (FIPB) on 20 May said it had deferred a decision on IRL's proposal until a later date. The delay marks the latest in a series of FIPB deferrals over the past few months in relation to IRL's bid to produce the newer AW119Kx model at its Hyderabad facilities in place of the discontinued AW119Ke.
The FIPB originally approved IRL's proposal in September 2013, but the agency came under political pressure to investigate its decision in light of bribery allegations against Agusta Westland in a separate 2010 contract to supply the Indian Air Force with AW101 VIP helicopters.

India defers decision on AW119 joint venture - IHS Jane's 360

The way we blacklist companies, works the same way as the US and EU impose sanctions. There are pros and cons. I cannot decide which one is more important.