Lockheed, India’s Tata in JV for aircraft components


Indian conglomerate Tata group said on Monday it had entered a joint venture with US defence manufacturer Lockheed Martin Corp to make aircraft components for the C-130 transport planes.

Lockheed, which has sold India six C-130 J transport aircraft in a $1 billion deal, told Reuters at the Bangalore airshow last week the country had expressed interest in buying another six.

The joint venture between Lockheed and Tata Advanced Systems is not the Indian salt-to-software giant’s first foray into defence, Reuters reports.

In 2009, Tata Advanced Systems formed a joint venture with Sikorsky Aircraft, a subsidiary of United Technologies Corp. to make aerospace components in India.

The joint venture followed a long-term contract signed in June 2009 between the two companies to assemble Sikorsky S-92 helicopter cabins.

Tata is now partnering with Lockheed on a transport aircraft considered the world’s most advanced.
“This partnership is established as a strategic element of our global supply chain and solidifies our presence in India,” Ralph Heath, Lockheed’a executive vice president of aeronautics, said in a statement.

Global defence manufacturers are looking to expand their presence in Asia’s third-largest economy as India plans to spend $50 billion to modernise its military over the next five years.

In 2009, India introduced a new rule that made it mandatory for foreign defense firms to source 30 percent of their equipment locally to boost the domestic defense sector. India is now looking to raise that figure to 70 percent in a decade, which is likely to lead more firms to seek Indian joint ventures.

Executives at the biennial Indian air show held in the southern city of Bangalore last week called for India to ease its limits on foreign ownership in the sector, currently capped at 26 percent.

Lockheed is also in the race for India’s $11 billion contract for 126 fighter jets, which would be one of the largest export tenders in the history of defence.

Lockheed’s F-16 is competing with Saab’s (SAABb.ST) JAS-39 Gripen, Boeing’s (BA.N) F/A-18 Super Hornet, Dassault’s (DAST.PA) Rafale, Russia’s MiG-35 and EADS (EAD.PA) unit Cassidian to win the fighter contract.

Cassidian is a partner in the Eurofighter Typhoon, a four-nation consortium of EADS, representing Germany and Spain, Britain’s BAE Systems (BAES.L) and Italy’s Finmeccanica (SIFI.MI).