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Prior to BRIC Summit, India works on defence manufacturing deals with South Africa


Heightening up the traditional ties between India and South Africa, the leaders of both the nations agreed to expand engagement in crucial areas of defence production, manufacturing, mining and minerals while vowing to cooperate “actively” in combating terrorism and dealing with issues at multilateral agendas. South Africa is a major global exporter in military production.

Both leaders were engaged in wide-ranging talks on consolidating traditional links by fostering trade and investment ties, especially in manufacturing, mining, renewable energy and pharma sector.

Referring to opportunities in the defence and security sector, Prime mInister Narendra Modi said companies from both countries can pool their capacities to jointly develop or manufacture defence equipment and platforms.

“Beyond economic ties, and links of business, trade and investment, we can also partner in the field of defence and security. Both, at the level of industry and for our strategic and security needs,” he said.


The dialogue was followed by the signing of four agreements to strengthen ties in areas of information technology, arts and culture, tourism and science and technology.

During the meeting, Mr Modi thanked Mr Zuma for South Africa’s support to India’s membership bid to the Nuclear Suppliers Group.

The evangelization of the ‘Make in India’ project– and particularly native defence production – in countries and military markets across the world has become an urgent necessity.

Even after announcing an extremely relaxed foreign investment regime, India has earned only over just Rs. 1 crore as the total amount of FDI inflows in the defence sector over the past one-and-a-half years. India last month had relaxed norms to allow 100% FDI in Defence Sector.

Over the last decade, there have been a few South African investments, either directly or indirectly through technology partnerships with Indian companies.

Most notable amongst them was defence systems manufacturer, Paramount Group and Ashok Leyland deciding to set up, joint manufacturing assembly plant that would build mine-protected, armoured vehicles for the Indian military and for export markets

In 2015, Hindustan Aeronautics Limited (HAL) and South Africa’s Saab Grintek (a joint venture between Sweden’s Saab and SA’s Freetel) signed a relatively small ($80 million) deal for “integrated self-protection systems” for India’s Dhruv Advanced Light Helicopter. These systems will however not be manufactured in India, but will be made out of Saab’s subsidiary in Johannesburg.

Sources reveal that Defence secretary Mohan Kumar is leading yet another delegation to South to the Africa Aerospace and Defence Exhibition. This will be the platform for pitching the ‘Make-in-India’ vision, as it presents an opportunity to follow-up on some of the promises and ties forged during the prime minister’s visit in July.

Ahead of the BRICS summit in October, and in the lead-in to the inking of the LEMOA pact, defence ministry officials have also reassured their Russian counterparts that the strategic defence partnership between both countries has not weakened or become any less significant. For instance, in the last month, the groundwork for a number of mega defence deals has been laid, the two most important of which are negotiations for a future fifth-generation fighter aircraft and a number of defence purchases including the Rs 40,000 crore acquisition of five S-400 Triumf advanced air defence missile systems.

“Many of the promises given to Russian officials are very forward-looking and are just simple reassurances. The fifth-generation fighter aircraft, for instance, is many years away and the Triumf missile acquisition still has hurdles. But this kind of posturing is important when you don’t want to disturb any defence partnerships, especially with the BRICS summit coming up. It could be possible that Mr Modi’s South Africa venture is along similar lines,” said a senior defence analyst.


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