Article Posted on : - Feb 18, 2014

SINGAPORE (PTI): India will see more investments from American companies once it decides to raise the FDI level in the defence sector from 26 to 49 per cent, a top Boeing executive has said.

"49 per cent will see more investment from US companies," Lt Gen Jeff Kohler, Boeing's vice president of international business development in defence, Space & Security, told PTI at the Singapore Airshow.

Kohler made the comments on aviation industry-wide speculation about New Delhi increasing FDI in defence sector to 49 per cent from the current 26 per cent, with some expecting an announcement in the near future.

"It has been very difficult to go to our senior corporate leadership and justify an investment in India at 26 per cent FDI," said Kholer.

Kholer said he had often discussed investment potential in the huge Indian market with his colleagues in the aviation industry. "49 per cent or 40+ per cent makes it much more attractive," he said.

"If it truly goes to 49 per cent, it would allow guys like me to go back to the corporate leadership and say now we have an opportunity to go and invest. We can show the rate of returns (on investment) to our shareholders and board of directors," said Kohler.

"We have plans and if they actually change to 49 per cent in FDI we will have to go back to the more detailed discussions."

He disclosed that Boeing has identified quite a few small and medium enterprises in India which could raise the manufacturing capacity and capabilities. "There are technology companies we want to work with in software and other things on a wide variety of systems," he said.

Boeing has a large operation in New Delhi and a Research Centre in Bangalore. "We want companies in India to grow with our business as our partners for the long-term. We want them to be part of our commercial supply chain."

Besides, Boeing held discussions for setting up logistics support centres for the Indian Navy.

"We think the opportunities are still out there," said Kohler, adding that Boeing was continuing discussions with the Indians on various supply options.

Among other businesses and dealings in India, Kohler said Boeing was optimistic of signing a final contract for the supply of Apache and Chinook helicopters by end of this year.

Boeing would also deliver five C-17 transport aircraft to the Indian Air Force this year, having delivered five last year.