Thales, the French military, avionics & cybersecurity software group, is bullish on India, both as a market due to increasing orders from its defence sector and airline operators, and as an R&D hub with its massive engineering talent. Chief executive Patrice Caine tells Arindam Majumder in an interview that while the government has been pushing for local manufacturing, the company, which employs around 1,500 people in this country, also believes in design in India. Edited excerpts:
The leadership here is very convinced that this is going to be India's moment. What do you think?
If we take a reasonable time frame, let's say until the end of this decade, I think India has everything for a company like ours to be successful. Since we are a technology company, the primary requirement for us is the availability of talent and smart people. This country generates 1.5 million engineers per year. This is massive compared to European countries and even compared to the UK or the US. India generates 25,000 PhDs per year. This is massive. For a tech company like Thales, this (talent) is a primary criterion when we look at where we should invest and develop in the future. The Indian government has invited (companies) to make in India. For a company like ours, we believe in design in India.
Do you think India can become a hub in a highly specialised sector like avionics & aerospace?
For Thales, India is already a hub. It’s going to develop. Our engineering centres are mainly focused on the digital avionics space. Shortly, we are also going to use these centres for our defence projects and cybersecurity. India, while it is already being a big support centre for us, is going to grow significantly. Recently we won a contract from Airbus to design, develop and manufacture their newest flight management system. This is a very significant project for us. For the first time, the work will be shared between our centres of excellence in France and Bengaluru. In domains like software monetisation, 90% of the products are designed and developed here in our engineering centre in Noida.
So, you see India is already a significant hub where we design products to serve the global market. It will grow, it will develop and will double by 2027. Indian airlines now have the largest aircraft order book in the world. What is the prospect that you are seeing and how does that fit into your growth? It’s one of the reasons why we decided to set up a maintenance and repair organisation in India to provide avionics support to Indian airlines, many of which are our customers. This will be a unit which will provide support for major avionics components like flight management software. This will allow us to be close to major airlines like IndiGo and Air India. As a consequence, it will help airlines to increase their flexibility and turnaround time. How open are you to the idea of transfer of technology? We are very pragmatic and flexible. There is a very strong mandate by the Indian government to localise as much as possible. We are now looking at each deal on a case-by-case basis so that it becomes the best combination with our competencies. What has been the experience of working with public sector companies in India? Good. They have a deep knowledge of the local regulations and end users that are key strengths of these companies. They are competent as well. So, bringing together their knowledge of the end user with ours, it’s a good combination to serve. Due to geopolitical tensions, there is going to be increased defence expenditure by countries. Are you seeing that translating into orders for you? There is a correlation. In defence, our contract is already huge. So even if we don’t get any contract from the ongoing situation like Ukraine, we are perfectly balanced. Of course, (we have a) significant market share in the UK, Australia, Middle East countries like the UAE, Saudi Arabia and Qatar, as well in India. So, there are sufficient opportunities. But the war in Ukraine has not translated into very big orders for Thales. You are very bullish on cybersecurity and segments like data protection. India recently announced its Data Protection Law. Have you started getting contracts from Indian companies? We are currently the world leader in data protection and we are going to extend our products. India is already a big market for us, and we are expecting many more contracts.
By Arindam Majumder
https://economictimes.indiatimes.com/epaper/delhicapital/2023/oct/19/et-front/india-able-says-caine/articleshow/104536389.cms
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