Airbus maker may shift some manufacturing to India

New Delhi: The European aircraft consortium, EADS, has said that it may start producing in India so as to be closer to its customers here. The Company Chairman, Mr Louis Gallois, told newspersons at the ongoing Berlin airshow that if EADS wanted to sell in India, it would also have to look at producing here.
The statement comes in the wake of Airbus maker, EADS participating in two ongoing Indian defence procurement programmes — the 126 medium multi-role combat aircraft being acquired by the Indian Air Force and 150 helicopters for the Indian Army.
The terms of both contracts specify that the eventual winner will be allowed to ship the first batch of aircraft from the supplier’s manufacturing base, but will eventually have to shift the manufacturing capability to India.
Officials feel that any decision to move production to India could be beneficial to the European consortium. “Currently, most of EADS production is in the Euro zone, while payments are generally made in dollars, which is not very favourable due to the exchange rate fluctuations these days. Besides, if the company wins any of the orders in India, it can claim that it is already sourcing from here and seek adjustments against the offset clause that is mandatory in Government contracts,” an official said.
28/05/08 Business Line

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Categories: Foreign May 2008, Indian Aviation- In General May 2008