BENGALURU (Reuters) - Foreign aircraft manufacturers offering to make combat jets in India will have to win approval from their governments, Indian Defence Minister Manohar Parrikar said, in a measure aimed at ensuring projects are not affected due to policy flip-flops.
These comments come at a time when U.S. firm Lockheed Martin has said the new administration under President Donald Trump may want to take a "fresh look" at its proposal to move production of its F-16 combat jets to India. The former U.S. government led by Barack Obama had supported the plan.
There are concerns that a veto on making the F-16 in India would not only hit Lockheed, but also threaten other military contracts to come up in India for U.S. firms such as Boeing, Northrop and Raytheon.
Parrikar's comments suggest the minister is keen U.S. firms get a clear go-ahead from Trump, who has criticized companies that have moved manufacturing overseas and then sold their products back to the United States, before starting projects in India to avoid any hurdles down the road.
"If someone wants to shift their plant to India, or set up a new one, it is not an issue," Parrikar told a news conference on the sidelines of India's biggest air show aimed at showcasing Indian aerospace capabilities.
"But if these original equipment makers are proposing something (local production), they will have to get their government's approval. That is my requirement."
The main condition for the contract to supply hundreds of fighter planes to India's air force is that it has to be made in India, in collaboration with a local partner, he added.
India needs 800-1000 helicopters and 300-400 combat planes, Parrikar said at the air show in the southern city of Bengaluru.
Sweden's SAAB, which is offering to build in India with a local partner, demonstrated its Gripen jet at the air show, while Lockheed showed its F-16 plane.
Lockheed has been talking to Trump's teams and the U.S. Congress for several months on its proposed sale of F-16 planes to India, a spokesman told Reuters in Washington last week.
Lockheed's plan is to build the F-16 to equip the Indian Air Force, and not ship them back home.
India under Prime Minister Narendra has embarked on a massive drive to build locally and end the country's status as one of the world's biggest arms importers.
Analysts expect the country to spend $250 billion on defence modernization over the next decade.
"We need to manufacture aircrafts in India. There is scope here, not all countries manufacture," said India's civil aviation minister, Ashok Gajapathi Raju.
(Additional reporting and Writing by Sanjeev Miglani; Editing by Himani Sarkar)