Airbus talking to Indian firms Reliance, Mahindra and Tata for helicopter JV

Airbus Helicopters is reportedly in talks with India's Mahindra and Mahindra, Reliance Industries and JLR parent Tata Group to jointly make military helicopters, to comply with rules aimed at supporting an emerging Indian defence industry.

The company, a unit of the Airbus Group, is offering to produce its light utility AS550 Fennec and the medium lift EC725 for India's armed forces, which are dependent on an ageing fleet of Chetak and Cheetah helicopters.

Rainer Farid, a senior Airbus Helicopters executive told Reuters on the sidelines of the Aero India airshow in Bangalore: "We are in the selection process, talking to different industries to form a JV [joint venture]."

State-run Hindustan Aeronautics (HAL) is the only Indian firm manufacturing helicopters, suggesting that global defence firms will have to partner with a private company building a product for the first time and from scratch.

Farid said that was a concern. "It is a tough task because you need to establish your vendors here which are not as existent as in other countries."

'Make in India'

Under Prime Minister Narendra Modi's "Make in India" initiative, foreign contractors used to selling directly to New Delhi must partner with local companies and transfer more work to help grow India's nascent defence industry.

Last year, the government scrapped the planned acquisition of 197 light utility helicopters in a bid to encourage competition among domestic companies that form joint ventures with foreign suppliers.

Foreign ownership in joint ventures in India's defence industry is capped at 49%. Foreign firms have said that majority ownership will ensure quality and expedite India's drive for its own manufacturing base.