After six decades of presence in the country, French aerospace company Thales is set to take the next big leap in the country

by Satyanarayan Iyer

Thales Group chairman and CEO Patrice Caine said India is among the top three priority markets for the manufacturing conglomerate and that the company will line up “significant investments”, into the country over the next three to five years.

“India is among the top three priority countries for Thales... meaning we mobilise at the group level the necessary energy and focus to grow our presence in India. We will be making these investments for winning new markets and new customers,” he said.

Thales plans to not only manufacture more in India, but also use it as a hub for exports into other neighbouring regional markets.

The company has been present here since 1953 and draws bulk of its revenue of 300 million euros from the defence sector — primarily through joint ventures. Thales also hopes to make good of “challenging”, but fast-emerging opportunities in the field of ground transportation and aerospace. “We have ambitions to reach 1-billion-euro revenues in India in the next three to five years,” Caine said.

Additionally, Caine said the offset clause in defence contracts handed out by the government is a strong incentive to move the supply chain to India from Europe. The Centre’s defence procurement policy requires foreign majors to source a part of their raw materials from domestic players. “This is one way to ensure offset obligations, but more importantly to set up genuine engineering capabilities so that we can make products that will serve the domestic markets as well as for exports,” he said.

Caine added that many see the offsets as difficult and as a constraint.

“They think it will be much easier with a straight sale. That is not my opinion,” Caine added.

Caine said Thales could double its overall headcount in India to about 3,000 engineers in the next three years to serve the company’s ambition of growth here. He said the quality of engineers in India — a critical input for its business plans here — is really good.

As Thales sells a lot of products in the Indian market, it also sells its cyber-security solutions as a bundled suite with its products. It has globally set up significant capabilities with respect to cyber-security over the past couple of years. It plans to set up a digital factory soon in Asia, but Caine did not disclose the location.

“Yet to finalise the candidate, but India is a potential candidate,” he said.

The company’s executive VP (secure communications and information systems) Marc Darmon said, “We limit ourselves in India to cyber secure what we sell here. Whatever products we sell in India, we use cyber security as a bundled product. But So far, we don’t sell our cyber-security solutions to Indian companies as there are very strong IT companies (doing that) in India.”

Cyber-security is a 500-euro-million business for the group and is growing at about 9-11% globally every year.