Rafale engine manufacturer reviews tax system request for India

Rafale manufacturing company Safran CEO expressed his willingness to implement investment plans for India but wished for the Indian tax system not to be terrorizing.

Paris: French multinational Safran, the manufacturer of the M88 state-of-the-art engines fitted in the Rafale fighter jets acquired by India, said, it asked the Indian government not to penalize the company on tax and customs matters.

During Defence Minister Rajnath Singh's tour of the engine assembly plant near Paris on Wednesday, company CEO Olivier Andries spoke of Safran's major investment plans for India but expressed a wish for the Indian tax system not to be terrorizing.

However, in what appears to be a case of lost in translation, the company later stressed that there had been a misunderstanding as the CEO was speaking out against a penalizing tax and customs regime which was allegedly misheard as terrorizing.

"For us, it is obvious that we should have a maintenance repair and overhaul shop in India to serve our Indian airline customers. But for that, we need to make sure that the tax system and custom system is not penalizing us," company's CEO stated.

"We would like to discuss this point with the government to make sure that it makes sense for us, versus an MRO (maintenance, repair, and overhaul) shop that would be outside of India. Frankly speaking, we would like to develop this shop in India," the statement added.

After his three-day visit to France on Wednesday, Rajnath Singh had taken specific note of any tax concerns that foreign investors may have and told a gathering of top CEOs of defense manufacturing industries that the Indian government was open to any further rationalization that may be required to facilitate the Make in India program.

"For Make in India in defence if there is need for further tax rationalization, it may be considered suitably, he said as he extended an invitation for French companies to participate in the DefExpo 2020 being held in Lucknow next year.

Singh on Thursday left France at the end of a three-day visit which he told had been extremely productive and would further strengthen bilateral defence ties.

The minister who took formal charge and flew a sortie of the first of 36 Rafale combat jets to be inducted into the Indian Air Force during the tour, left with a message for French companies to make India their base for production of defense equipment.