TATA signed MoU with IAI for developing defence product

Indian Steel giant Tata group of Industries has signed a Memorandum of Understanding with largest Israeli aerospace company Israel Aerospace Industries (IAI) for developing a wide range of defence product for India on Sunday. The deal was finalised in the ongoing Defexpo in Pragati Maidan in New Delhi.

With this deal the Tata Advanced Systems, the wholly owned wing of Tata group that focuses on defence and aerospace solutions has to manufacture and develop missiles, pilotless aircrafts, electronic warfare systems, radars and other security systems and defence equipments.

It was the forth-major defence deal signed in Defexpo. On Saturday, Tata has tied the knot with European Defence and Aerospace Consortium for developing advanced tactical communications system project for Indian Army while just a day before on Friday, it made a contract with US based Sikorsky Aircraft Corporation for manufacturing cabins for Sikorsky’s S-92 helicopters. On the other hand, a joint venture of the company with American aircraft major, Boeing was the biggest ever deal signed in this Defexpo on the same day.

Announcing about the deal with IAI, Ratan Tata, the chairman of Tata group has said in a statement, “We believe the coming together of the Tatas and the IAI will positively impact the growth of defence industry in India and complement the efforts of our defence labs, ordnance factory board and defence public sector undertakings.”

Commenting upon the agreement, IAI chief Itzhak Nissan said, “The new IAI-TATA JV reflects our commitment to deepen our relations with Indian industry. Together, we will be able to offer a wide range of defence products and to boost the capabilities of local Indian defence industries.”

These deals would be very fruitful for Indian economy and security because India will gain a handsome amount from these deals as per rule of Indian defence purchase policy, which says, ‘the amount between 30 and 50 per cent of all imports over Rs. 300 crore had to be sourced from India.

The Indian defence purchase policy turns the foreign companies in coming together with Indian companies if they are willing to consume their products in the Indian market.

"India is a very big and important market for us," said a senior spokesperson of IAI in a released statement commenting over the Indo-Israel relationship. "It's been a very intimate relationship of over 12 years. We are looking to further expansion”

The UPA government despite the difference with its ally Left opted the defence relationship following the path of previous NDA rule. India has purchased as much as USD 7 billion worth of military hardware and software product since Kargil war of 1999.

If the row continues like this, Israel may become the second biggest armament supplier for India while Russia is still on the top despite of some dispute held in previous deals.