Giving an Upward Thrust to the Indian Aerospace Sector
In what has been considered a major boost to India’s far from mature aerospace sector, the European aerospace and defence major,Airbus Industries, has inked a deal with Mahindra Defence, a part of the multi- billion dollar Mahindra conglomerate, to float a joint venture to manufacture a variety of choppers in India and also bid for defence contracts under the Make in India initiative of the Indian Prime Minister Narendra Modi. Incidentally, this development comes closely on the heels of Airbus Defence and Space Chief Executive Officer(CEO), Bernhard Gerwert, meeting Modi to express the interest the company has in contributing to Make in India campaign. Significantly, in recent months, Make in India drive has emerged as one of the vital pillars of the exercise for attaining defence self- reliance.“The tie up is in line with our intent to develop an indigenous industrial ecosystem dedicated to helicopters.The joint venture will be dedicated to supplying the Indian armed forces with Made in India, state of the art helicopters of high reliability, quality and safety standard based on combat proven platforms,” says Guillaume Faury, Airbus Helicopters’ Chief Executive Officer(CEO). This joint venture aims to become the first Indian helicopter manufacturer under the Make in India initiative. Significantly, during Modi’s visit to Airbus Industries’ facility at Toulouse in France in April this year, the company had assured him that outsourcing from India would increase to US$ 2-billion from the current US$400-million over the next five years.
As envisaged now, this joint venture is expected to serve as a prime contractor for India’s multi million dollars defence helicopter tenders that would include reconnaissance and surveillance helicopters, naval utility helicopters and the naval multi role helicopters procurement programmes. ” Perhaps the biggest business opportunity ahead of this joint venture is the need for more than 400 light utility helicopters projected by Indian defence forces.
As it is, India, the largest importer of the defence hardware in the world, is among the top ten nations in terms of military expenditure. India invests around 1.8% of its GDP(Gross Domestic Product) on defence sector. Around 60% of the needs of Indian armed forces are met through imports. Against this backdrop, both the Indian industrial enterprises and foreign aerospace and defence entities are preparing ground for foraying into the Indian defence and aerospace sectors.” A number of leading industrial houses have nascent but growing defence industry capabilities .These companies need to invest now in order to build capabilities that stretch their technical, operational research as well as partnering capabilities so that they are considered world class producers as the industry matures,’ says a study from industry body ASSOCHAM (Associated Chamber of Commerce) and market research and consultancy firm, Price Waterhouse Cooper. Among the leading Indian industrial houses that have forayed intothe defence and aerospace sectors are Reliance Industries Ltd, Punj Lloyd, Bharat Forge Ltd, Godrej, Tata Group as well as Larsen and Toubro (L&T).
Meanwhile, the Airbus Industries is planning to join hands with Indian companies as well as firms in South and South East Asia region with a view to set up manufacturing facilities cluster in India as part of “Make in India” initiative. This manufacturing cluster would be distinct from collaboration this European aeronautical leader has already forged with Tata Advanced Systems Ltd (TASL) for the production in India of C-295 transport aircraft meant to replace the ageing Avro aircraft in service with the Indian Air Force (IAF).On its part, Airbus has a plan to set up final assembly lines for the production of helicopters, establish supply chain and related infrastructure in the country.
Even so Airbus is yet to identify the regional companies that could be roped in to form a part of this cluster. As it is, the C-295 transport aircraft project has already received clearance from the Defence Acquisition Council (DAC).On another front, Airbus also wants to manufacture electronic sensors in tie up with a partner in India. “India already has a centre stage role in our international activities and we want to increase its contribution to our products. We support Prime Minister Narendra Modi’s Make in India call and are ready to manufacture in India, for India and the world,” says Airbus. Reflecting the importance it attaches to India, Airbus Industries has consolidated its operation in India under a single company as part of “one roof “policy.
At the 51st International Air Show held in Paris in June this year,both Boeing and Airbus did express the view that India would be in a position to design, develop and build large aircraft over the years. As things stand now, like the Indian automobile industry, which graduated into building a variety of high end vehicles, after gaining experience in manufacturing various automotive components for foreign vendors, Indian aerospace industries which are now a source of components, subsystems and aero structures for foreign OEMs (Original Equipment Manufacturers) could create an eco system for the domestic manufacturing of “made in India” aircraft.
Indian private sector entities are all poised to make a mark in the burgeoning global aerospace market. For instance, Belagavi based Aequs aerospace SEZ (Special Economic Zone) as well as Bangalore based Dynamatic Technologies have notched up the distinction of being the direct, tier one suppliers to Airbus Industries. Not long back, the state owned aeronautical giant HAL(Hindustan Aeronautics Limited) was the only Indian tier one supplier to Airbus Industries. This development implies that in the years ahead, private aerospace entities in India can compete with HAL for a share of the global aerospace market.
In a development that could drastically alter the contours of the Indian aerospace sector, India’s largest aerospace machining facility was inaugurated at the sprawling campus of Aequs SEZ (Special Economic Zone) at Hattargi village near to Belagavi in Karnataka by the Defence Minister Manohar Parrikar on Sept.7. This was an indication enough that India’s state owned aeronautical major HAL can no longer be a monopoly player in the aerospace segment of the country. This state of the art custom built machining facility comprising 150 advanced CNC (computerized numerical control) machines will attract an investment of US$150-million over the next five years to manufacture aerospace machined components and sub assemblies for the European aircraft major Airbus. This facility covering a floor area of 100,00sqft will generate revenue of US$75-million per annum. In this context, Aravind Melligeri, Chairman and CEO of Aequs Aerospace says, ”This aerospace machining facility underscores our commitment to the global aerospace industry an Airbus Group. Airbus has been a key customer for Aequs and I am confident that this new facility will further benefit Airbus’s global aerospace supply chain”.
After Aequs Aerospace set up what is claimed to be India’s first full fledged aerospace SEZ to create an integrated aerospace eco system,a number of dedicated aerospace SEZs and aerospace parks have started mushrooming in various parts of the country. For instance, the Tamilandu Government has announced its plan to set up an aerospace park at Sriperumbudur near to Chennai to house 30 aerospace firms at an estimated investment of Rs.30,000-milion.On the other hand Anil Ambani led Reliance Group which planning high ticket investments in the defence and aerospace sectors, has announced to set up an aerospace park at the central Indian city of Nagpur. Reliance Aero-structures Company, a part of the Reliance Group, will set up the project in Mihan SEZ in Nagpur.
Not surprisingly then Boeing has entered into an agreement with Bharat Forge to cover a multi- year contract for the supply of titanium forgings for wing components. Under the agreement, Bharat Forge will begin supplying pre machined forgings from is facilities in Pune and Baramati in Maharashtra to Boeing in the first quarter of 2016. The titanium parts will be heat treated ,shaped in a forging press, and machined by Bharat Forge before being shipped to Boeing Portland for finish machining into components. The components will then be installed in the NG 737 and 737MAX aircraft wings. ”With India poised to become the fastest growing, among the large economies of the world, Boeing is proud to be a reliable partner for sustaining this projected growth. We are focussing our efforts to supporting Prime Minister Narendra Modi’s Make in India initiative by competitive supplier base in the country that is fully integrated into Boeing’s supply chain and we are skilling the frontline workforce to become capable of supporting aerospace growth manufacturing”, says Pratyush Kumar, President Boeing India.
Boeing, as part of its drive to tap into the potentials of Indian aerospace and defence sectors, has entered into an agreement with TASL for taking up the manufacture of aerospace and defence products including Unmanned Aerial Vehicles (UAVs).This collaborative arrangement will not only meet Indian requirements but will also aim at the export market .TASL has already on hand a contract for the supply of aero-structures for Boeing’s CH-47 Chinook and AH-61 helicopters.
In a development of significance that would give a big push to India’s long standing quest for defence self reliance through “Make in India” initiative, Pilatus Aircraft Ltd of Switzerland has entered into an agreement with Tata Advanced Systems Limited (TASL) for the manufacture and supply of aero structures for PC-12 green aircraft at TASL’s facility in the south central Indian city of Hyderabad. This tie up would include the assembly of complete airframe for the aircraft including integrated fuselage,wing, cockpit, ailerons as well as fins and rudders. Interestingly, in 2012, the Indian Air Force (IAF) had ordered 75 PC7 MK II basic trainers from Pilatus. Beyond this, DAC has cleared the proposal for the acquisition of 38 additional basic trainers from Pilatus.
On its part, Anil Ambani led Reliance Industries has unveiled an ambitious plan to make it big in the aerospace sector of the country. To this end, Reliance Defence and Aerospace has tied up with Saab of Sweden to bid for the ship borne UAV (Unmanned Aerial Vehicle) programme of the Indian navy. The company has also shown a keen interest in building helicopters domestically—in tie up with a global aviation firm—to meet the needs of the Indian defence forces. According to a spokesman of the company. “The Make in India initiative of the government provides a perfect landscape for setting up of a comprehensive defence industrial base in the country.”
For long, HAL was synonymous with the Indian aeronautical industry. Though at the ground level,HAL had put in place a variety of high end facilities for the licensed production of a range of aircraft, it could not efficiently utilise the resources to design and develop an entire aircraft literally from scratch. HAL, which is ranked among the world’s first 40 top aerospace manufacturing enterprisers, has on hand, an order book to a large extent composed of under licence products except for the Dhruv Advanced Light Helicopter (ALH). For the foreign vendors Indian defence and aerospace sectors present an exciting opportunity.
With a view to prepare HAL to face the competition from the nascent Indian private sector, T Suvarna Raju, Chairman, HAL has spelt out some of the initiatives meant to give a big upward thrust to the Indian aeronautical sector. To begin with, HAL would set up a greenfield facility near to Tumkur in Karnataka for the production of Light Utility Helicopter (LUH) and Naval Multi role Helicopter. On another front, HAL along with the Bangalore based National Aerospace Laboratories (NAL) will take up the design, development and production of 70-100 seater Regional Transport Aircraft (RTA)through a Special Purpose Vehicle (SPV).
HAL has quite often come in for the criticism for its poor product quality as well as time and cost overruns. What’s more, HAL is now faced with the prospect of losing its monopoly over the domestic aerospace sector. Even so it must be said to the credit of HAL that it has built up the expertise for manufacturing Russian origin air superiority fighter
Su-30 MK-I, a fourth generation combat aircraft, from the raw material stage HAL has also signed an agreement with the French engine major Snecma for the setting up of a joint venture in India for manufacturing aero engine parts. “We are strongly committed to contributing to the Make in India policy based on ambitious partnerships and extensive direct investment. The new venture is a further proof that we are actively strengthening our existing ties with HAL,” says Pierre Fabre, Chairman and CEO of Snecma.
Defence industry experts are of view that for the domestic industry, aided by Western manufacturers, a clear guideline and congenial ecosystem is needed to fulfil the needs of the Indian armed forces. According to ASSOCHAM, the present defence production policy is very generic and does not lay down a clear roadmap on how private sector participation will be harnessed to build India’s indigenous defence capability. Under Make in India initiative many contracts would be earmarked to the Indian private sector, which, in turn, will partner with foreign companies to manufacture locally the high end products. This is being projected as the initial step for the ultimate growth of the Indian defence production sector. In the second phase, after gaining experience, the Indian private sector companies will develop and manufacture the defence products themselves in the long run.
There is now an all round realization of the need for creating a pool of human resources talent to spur the growth of the Indian aerospace industry. To this end, under the multi-sectoral skills programme of the National Skill Development Council (NSDC), the newly constituted Aerospace and Aviation Sector Skill Council (AASSC) plans to groom 6,000 trainers and 5.2-lakh trainees in the country. With the Indian aerospace sector avidly looking forward for human talent, The NSDC has mandated HAL, Bangalore Chamber of Commerce and the Society of Indian Aerospace Technologies and Industries (SIATI) to set up the sector specific council.
In a major boost to the Indian aerospace sector, DAC has approved the development of indigenous Airborne Warning and Control System (AWACS) by the state owned Defence Research and Development Organisation (DRDO). This air defence system will have as its platform A-330 aircraft to be procured from Airbus Industries. This AWACS is designed to provide seamless 360 degree coverage of the air space. The next generation indigenous AWACS will serve as “eyes in the sky” to detect incoming aerial threats like hostile fighters, drones and cruise missiles from a distance of 400-km.AF is currently operating three Israeli origin Phalcon based AWACS.
On its part, DRDO will deliver two of the three Airborne Early Warning and Control (AEW&C) based on Embraer-145 aircraft to the Indian Air Force (IAF)before the end of this year. India is now looking at the possibility of this aerial defence system. South Africa, Brazil and Indonesia are known to have evinced interest in AEW & C. Brazilian aerospace major Embraer whose EMB-145 constitutes the platform for AEW & C has discussed the possibility of forging a partnership to produce the system and export it.
India, which has sent probes to Mars and Moon and developed and deployed a range of long range sophisticated missiles, should now exploit its capabilities and resources to position the country as a global aerospace hub that has the wherewithal to build both civilian planes and combat aircraft for not only meeting the domestic needs but also to make it big in the multibillion dollar global aerospace market.