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A new Era of A&D to Commence in the Modi Regime – Adani search opportunities in the A&D sector

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Gujarat-based Adani Group has shown intentions to footstep into defence and aerospace production, the sector has resurrect to new a ladder after Modi regime with its reiteration on huge defence spending interlock with its ‘Make in India’ drive.

A bunch of Adani executives has been meeting representatives of large overseas defence companies to explore tie ups for manufacturing a range of defence equipment, pitching the group’s mainstay asset — the country’s largest private port and SEZ at Mundra in Gujarat — with its sea and land linkages as a possible manufacturing location, at least five people familiar with the matter told ET.

The Adani Group is the latest among large conglomerates to set its sights on the defence and aerospace sector, an area of huge potential given India’s large needs and a shopping basket that has for some years bestowed it the status of one of the world’s biggest spenders in this area. The sources cited above said Adani executives had held high-level meetings in the past few weeks and exploratory calls are being made to almost all global defence and aerospace manufacturers who have liaison offices in New Delhi. At least two top Adani executives were scouring the sector and had been tasked to report back with possible opportunities, they added.

Among the companies that are being explored for partnerships include Swedish defence and aerospace company Saab, whose product line-up ranges from fighter jets to submarines. The Swedish company is keen on setting up production facilities in India and is eyeing major projects, including the Rs 60,000cr P-75I submarine contract. It has also offered to produce its light Gripen fighter jet in India.

The sources said Adani was also believed to be exploring possible linkages with Italy’s Finmeccanica, which has companies such as Alenia, Oto Melara and AgustaWestland. Other global defence firms that the Adani Group is looking at are US-based Textron that owns Bell helicopters and BAE, which is being considered for a $700-million contract to supply howitzer guns to the Indian Army.

Sources familiar with the exploratory discussions say the talks are mostly centred on specific ‘Make in India’ projects and that the Adani Group is keen to explore whether its large land holding in Mundra can be used to set up a defence manufacturing hub.

The Anil Ambani-led Reliance Group has also indicated its interest in entering the defence and aerospace sector. Groups such as the Tatas, Mahindra & Mahindra and Larsen & Toubro are beefing up their defence arms.

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