Don’t terrorise us on tax: Rafale engine manufacturer tells Defence Minister Rajnath Singh

India should provide an attractive business environment and not “terrorise us” with its tax and customs rules, the CEO of the French engine manufacturer behind the Rafale fighter jet told Defence Minister Rajnath Singh on Wednesday while announcing that the company plans to invest nearly USD 150 million in the country.

French multinational Safran, the manufacturer of the M88 state of the art engines fitted in the Rafale jets acquired by India, gave a presentation of its facility to the minister who took a tour of the assembly line of the company near the French capital.

“Visited the Engine Manufacturing Facility of Safran at Villaroche near Paris today. Safran is known for its engine making capabilities. They have also developed the engine for Rafale,” Singh said in a tweet.

“Happy to meet some of the young and bright engineers of Indian origin working at the Safran manufacturing facility. Their technical knowledge and hard work is impressive and inspiring,” he said.

During the presentation, CEO of the Safran Aircraft Engines Olivier Andries revealed plans for nearly USD 150 million investment in the country towards training and maintenance.

However, the CEO called on India for more support on its tax structure.

“India is set to become the third largest commercial market for aviation and we are keen to create a strong maintenance and repair base in India to serve customers,” Andries said.

“But we need to make sure that the Indian tax and customs system is not terorrising us,” he said.

The minister responded by assuring him that India was committed to providing the “right climate” for investments under the ‘Make in India’ initiative.

Singh also invited Safran to participate in the DefExpo in Lucknow in February next year, an invitation that was accepted by the company which designs and develops engines for civil and military aircraft at its assembly line at Villaroche in Reau, near Paris.

The minister was taken on a tour of the assembly line, where all the Rafale jet M88 engines fitted for India’s 36 aircraft will be assembled.

Safran gave the minister details of its collaboration with Hindustan Aeronautics Limited (HAL) and reiterated its commitment to the ‘Make in India’ as well as ‘Skill India’ programmes.

“We have a long association with India and all Indian airlines are our customers. We are hopeful and optimistic that we will have a positive reception to our expansion plans. We are keen to share the know how and create an engine ecosystem in India,” Andries said.

The company, which says it already has a USD 15-million investment in the country where it also trains 500 engineers annually, claims to be on course to meet its off-set commitments in India as part of the Dassault Aviation deal signed by India in September 2016.

It is now seeking the government support to set up maintenance, repair and overhaul (MRO) facilities in India, with training plans for further 500 engineers and skilled technicians.

Defence secretary Ajay Kumar, part of the ministerial delegation to France, assured the company of support and asked them to prepare a document highlighting any “pain points” they foresee in their expansion agenda, which will be taken into consideration.