The Indian government has shown its interest to purchase majority stakes in Embraer’s commercial aircraft division, said a top ranking government official to Business Standard.
“We are very interested. We are exploring alternatives,” the official said.
Actually, on February 2019 Boeing announced to purchase 80% stake in Embraer commercial aircraft division at a cost of $4.2 Billion.
But in April 2020, Boeing scraps the deal due to impact of Coronavirus on the aviation, leaving Embraer in the midstream.
The Indian government has expressed clear willingness to enter in to the deal and the same has conveyed to the Brazilian government.
As per reports, Indian government may use the sovereign wealth fund to finance the deal as HAL (Hindustan Aeronautics Limited) is not able to purchase majority stake in the company.
“The Brazilian government would be naturally supportive of any contribution of Embraer to India’s growth story and the strengthening of bilateral relations,” said a Brazil embassy spokesperson, without divulging details.
If India were able to purchased a suitable stake in Brazilian aerospace company than this can help in making strong Civil Aviation market in India.
India will require hundreds of new aircraft for civilian operations under UDAN scheme and Embraer aircraft are highly suitable for these operations.
Purchase of an Aerospace company will definitely help in setting up commercial aircraft manufacturing in India.
The Indian government needs to act fast as the Brazil has also floated the Embraer bid to China.
While it also depends upon Brazilian government, whether they interested in selling majority stakes to India or not, as the Brazilian government holds veto rights over the company through a golden share.