Swedish defence major SAAB on Monday announced that it will start producing the iconic Carl-Gustaf M4 weapon systems at a production facility in Haryana by next year, months after receiving the approval for 100 per cent foreign direct investment (FDI) for the mega-project.

SAAB became the first foreign defence producer in India to receive the clearance for 100 per cent FDI when the government approved the Carl-Gustaf M4 manufacturing project in October last year.

On Monday, SAAB marked the start of construction of the production facility in Jhajjar by carrying out a ground breaking ceremony at the 3.6-acre complex.

It is SAAB's first manufacturing facility for the Carl-Gustaf M4 outside Sweden.

After receiving approval for 100 per cent foreign direct investment, SAAB established a new company, SAAB FFVO India Pvt Ltd, which will fully own the new manufacturing plant and produce the Carl-Gustaf M4 weapon.

"I am proud to start constructing our first facility outside Sweden for Carl-Gustaf, a product that has a long history with the Indian Armed Forces," Gorgen Johansson, Senior Vice President and Head of SAAB's business area dynamics, told reporters.

"We look forward to starting production of our excellent product, now engineered and made in India," he said.

Johansson said the production of the weapons system at the facility will begin from next year. Around 100 people are being employed at the unit.

Sweden's State Secretary for Foreign Trade Hakan Jevrell said the production facility is a testament to the strong bilateral relationship between the two countries.

"Today is an important milestone for Sweden and India. SAAB's factory will be the first foreign fully-owned defence production facility in India. It is a testament to the strong bilateral relationship between our countries," Jevrell said.

The manufacturing facility is being built at the MET City in Jhajjar.

SAAB said the company will partner with Indian suppliers and fully meet the requirements of 'Make in India' for the systems manufactured in the facility.

At the new factory, SAAB will deploy complex technologies including the latest sighting technology and advanced carbon fibre winding to manufacture Carl-Gustaf M4 for the Indian armed forces, and components which may be included in other users' systems.

Johansson said the entire process to receive the regulatory approval took around six months and that SAAB FFVO India Pvt Ltd is a fully Indian entity.

In May 2020, the government announced increasing the FDI limit in the defence sector from 49 per cent to 74 per cent under the automatic route.

The government allows 100 per cent FDI for specific cases.

Johansson was however tight-lipped on the investment SAAB is making for the manufacturing plant or the volume of orders for the weapon systems that the company is expecting from the Indian Army.

The Carl-Gustaf system has been in service with the Indian Army since 1976. Through its wide variety of ammunition, Carl-Gustaf has emerged as a key shoulder-launched weapon in the Indian Armed Forces.

Almost all the forward posts of the Indian Army along the Line of Actual Control (LAC) with China have been equipped with previous versions of the weapon systems.

Johansson said the facility in India will support the production of the weapon systems for the Indian armed forces as well as components for users of the system around the world.

However, exports will be subjected to New Delhi's regulatory approvals relating to end users.

As per the understanding with the government, the weapons systems will first be sent to Sweden from where the company would ship them to respective export markets.

"Empowered by its 22,000 talented people, SAAB constantly pushes the boundaries of technology to create a safer and more sustainable world," the company said in its statement.

"SAAB designs, manufactures and maintains advanced systems in aeronautics, weapons, command and control, sensors and underwater systems," it said.

SAAB is headquartered in Sweden. It has major operations all over the world and is part of the domestic defence capability of several nations.

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