October 11, 2025

New Delhi is buzzing with fresh ideas as Patrice Caine, the CEO of French defence giant Thales, drops a bold suggestion! He says India should consider loosening its tight rules so foreign companies can fully own their local defence units. Currently, India allows 100% foreign investment in defence, but going past 74% ownership means dealing with a complicated maze of government approvals. Caine points out, "Countries like France, Australia and the UK — they make a clear distinction between protecting intellectual property and economic rights. They don’t care who owns the company as long as the intellectual property is protected by them." He hopes India may soon follow this smart path. Right now, only a few get the green light from New Delhi for full ownership; Sweden’s Saab leads the pack with a 500-crore anti-tank weapons project. Meanwhile, Indian giants like Reliance, Tata, Adani, and Mahindra team up with foreign firms to boost local defence production and exports. Caine insists that a foreign-owned company can still be ‘very Indian.’ He says, "I do challenge the notion of an Indian company because our India unit, Thales India, is very much an Indian company. It is based in India. People working in the company are Indian citizens." Thales mixes joint ventures with fully owned entities to meet India’s strict rules. But Caine admits, “This is probably a model that takes more time... it’s obviously less fluid to organize or to align interests between two groups than with your own subsidiary.” Since 2017, Thales has worked with Reliance Defence to build radars and airborne electronics as part of the Rafale fighter jet deal. Last year, they joined hands with Adani Defence to make 70mm rockets in India. Why is this happening now? India’s defence spending is soaring after the tense clash with Pakistan earlier this year. Caine is super confident about Thales’ future here, aiming to expand engineering and co-develop advanced avionics for global use. He calls it the “magic triangle” — "make India, innovate in India, and export from India." This makes India a shining star in their global plans. Thales India is also co-creating a new flight management system for Airbus and opened a big avionics repair center near Delhi’s airport in March. This move supports Indian airlines like IndiGo and signals a shift from overseas hubs to local servicing. With global tensions fueling defence budgets, Caine expects even bigger sales growth for Thales by 2025. The message is clear: India is not just a market; it's rapidly becoming a world-class defence innovation hub. Could India soon change rules and welcome full foreign ownership? This spicy debate might heat up the defence sector even more!

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Tags: India defence sector, Foreign investment, Thales ceo patrice caine, Make in india, Joint ventures, Defence manufacturing,