BAE Systems in talks with HAL for likely JVs

BAE Systems, Europe's largest defence company, said it is 'detailed discussions' with Indian aerospace and defence manufacturing giant, Hindustan Aeronautics Ltd (HAL), over joint ventures that would expand its business presence in India. According to Mike Turner, the outgoing chief executive, BAE hopes to create joint ventures with Indian companies as part of its plans to expand operations in the sub-continent.

BAE is already partnering HAL in a $1.5 billion project which will supply 66 Hawk advanced jet trainers to the Indian Air Force. Turner said: "We are in detailed discussions with HAL to further our relationship and have a bigger role in India in the future."

BAE has also created a joint venture for armoured vehicles with Indian automotive giant, Mahindra & Mahindra, which was in the news at the beginning of the year for its bid for Land Rover and Jaguar, alongside eventual winners, the Tata Group.

BAE has identified India as its seventh "home market" after Britain, the United States, South Africa, Sweden, Australia and Saudi Arabia.

It is being speculated that BAE might be interested in developing a JV with HAL to manufacture the  Eurofighter Typhoon. The advanced fighter aircraft is in the running for the Indian Air Force's 126 medium range multi-role combat aircraft (MMRCA) contract. All six contenders, Dassault, Rafale, MiG, Saab Gripen, Lockheed Martin and Boeing along with Eurofighter have submitted their bids, which are undergoing preliminary evaluation by the government.

Meanwhile, for the first half of this year, BAE said that sales were up 12.5 per cent to $7.7 billion and operating profits had gone up 23 per cent to $789 million. According to Ian King, the chief operating officer, who is due to step into Mike Turner's shoes after he retires, the company would post improved results in the second half of the year, as sales were mostly going to mature in this period.