As part of the "Make in India" initiative, Tata Advanced Systems links up with Airbus to produce C-295 transports in country. Airbus said every one of its programs includes parts from India
Defense
manufacturing in India is undergoing a transition from a traditional
buyer-supplier relationship to a more open and transparent one. Easing of
licensing policy, an increase in foreign direct investment from 26 to 49
percent and a forecast that envisions a 10-fold increase in exports (presently
at a miniscule 0.3 percent) are drivers propelling a defense sector currently
riding high on the “Make in India” program. The initiative was launched and
promoted widely by new Prime Minister Narendra Modi.
An
attempt to boost GDP, Make in India sees aerospace and defense (among
other industries) as its focus to enhance skill development and build an
efficient manufacturing infrastructure. Transparent policies and speedy
implementation are also vital ingredients.
“MAKE IN INDIA”
Since
India’s defense requirements are largely based on imports, Make in India
encourages private-sector participation and alliances with OEMs for
internal use and to bolster exports. As India’s procurement gets a kick start
with mega projects such as the 36 Dassault Rafales, M777 ultra-light
howitzers, medium transporters and light utility helicopters, among others,
opportunities are increasingly opening up for aviation- and defense-product
manufacturing and supply-chain sourcing.
Defense
offsets are expected to generate $4 billion over the next eight years. The
policy (which stipulates the mandatory offset requirement of a minimum 30
percent for procurement of defense equipment), once introduced in capital
purchase agreements with foreign defense players, should ensure that an
eco-system of domestic suppliers grows rapidly.
“The
Make in India policy has thrown open a new arena of opportunities for
businesses…the imperative to innovate, driven largely by global opportunities,”
said Samir Yajnik, president of sales, Asia Pacific, and COOAsia Pacific
at Tata Technologies (Hall 4 B84, Hall 3 B80). “Intense competition
and technological advances are leading to a need to tap global knowledge
resources. This will better assist in shortening production cycles and reducing
development costs, while allowing products to be developed for local market
with differing customer preferences, geographic conditions or regulatory
requirements,” he said.
Tata
Technologies has a joint venture with government-owned Hindustan Aeronautics
Ltd (HAL, Chalet 128). Tata HAL Technologies addresses the entire
virtual value chain for aerostructures and related aero systems. Based in
Bangalore, the JV delivers engineering, design, optimization, and
manufacturing solutions for major aerospace OEMs and Tier 1 suppliers in
North America and Europe.
Under
the twin pressures of financial austerity and environmental constraints, frugal
innovation will become critical over the next few years, said Yajnik. “For
example, the Indian aviation industry is expected to show significant growth,
which will usher in opportunities in the maintenance, repair and overhaul [MRO],”
he added.
“Indian
aerospace is leapfrogging into a new era of strategic autonomy,” added Air Vice
Marshal S.J Nanodkar, assistant chief of air staff, operations. However,
glitches remain in the policy. In an effort to streamline defense procurements,
the Ministry of Defense is set to make changes in the soon-to-be-announced
Defense Procurement Procedure (DPP) 2015. A major change expected is the option
to migrate from offset obligations to a ‘Buy and Make’ category, where products
being manufactured in India will be considered as meeting offset obligations,
providing a boost to ‘Make in India.’
“I want
our offsets policy not as a means to export low-end products, but to acquire
state-of-the-art technology and skills,” said Modi. The new policy draft, that AIN has
reviewed, says that transfer of technology (TOT) will be made to the Defense
Research & Development Organization (DRDO) so that it can assess
the demands on the industry. “This is a bit far-fetched. The role of the OEM ends
once TOT is done, and why should DRDO decide which Indian
Production Agency should receive the technology?” a private sector official
told AIN.
“There
is also the question of liability. We need the OEM to share liability
for the product that comes under TOT,” said Puneet Kaura, chairman and managing
director, Samtel Group, which recently signed a cooperation agreement with
General Dynamics to co-produce digital displays in India for a range of
military and non-military vehicles worldwide. Samtel has a lot at stake. It has
supplied display shipsets for 500 civilian aircraft, via Honeywell, and hopes
to export about 1,000 shipsets by next year. More than 100 Indian Air Force
Sukhoi Su-30 fighters are fitted with Samtel displays. “We have also gotten
into the electronic warfare area which we have started to develop with a
foreign partner,” said Kaura. Moving forward, Samtel is looking at multiple
line replaceable units (LRUs).
A
request by the industry to include services in the policy has not been acted
upon yet. “This puts MRO off the list,” said the official.
On
reforms in the offsets policy, Modi has said candidly: “I am acutely aware that
it still needs a lot of improvements. We will pursue them in consultation with
domestic industry and our foreign partners.”
“Unfortunately,
some official in the MoD has just done a ‘cut and paste’ on Modi’s
announcements without seeing the practical aspects,” said an
industry official.
C-295S IN INDIA
During
Modi’s visit to Toulouse in April, Airbus Group (Hall 17, Stand C4) CEO Tom
Enders said, “India already takes a center-stage role in our international
activities and we want to increase its contribution to our products. We support
Prime Minister Modi’s ‘Make in India’ call and are ready to manufacture in
India, for India and the world.”
“Land,
labor and capital are essential for the Make in India campaign,” said Arijit
Ghosh, president of Honeywell Aerospace in India (Chalet 100). A focus on
developing an entire learning ecosystem around aeronautics and training would,
“boost capabilities of domestic employees and suppliers,” he added. In
partnership with Tata (Hall 4, Stand B84), Ghosh said the first phase this
year of the licensing agreement with Tata Power’s strategic engineering
division to produce Honeywell’s tactical advanced inertial navigator (TALIN) in
India will include production kits, training and expertise to assemble the
system. “By 2016, we plan to move into the second phase where Tata Power
manufactures these build kits under license from Honeywell,” said Ghosh.
Airbus
Defense & Security, which has emerged as a single vendor for
India’s medium transport bid, has linked up with Tata Advanced Systems Ltd to
produce C-295s in India. It is also active in aerospace manufacturing, having
35 suppliers working across the Airbus supply chain, contributing $400 million
to turnover in 2014. “Every Airbus program is now partly made in India,” said
Dwarakanath Srinivasan, managing director of Airbus India.
Airbus
has 196 commercial passenger aircraft flying in India, a fleet that creates
further opportunities. “Airbus has been a major driver for commercial aerospace
manufacturing in India in the past decade,” said Aravind Melligeri, CEO of
Aequs, which manufactures landing gear components and ships them to Airbus for
final assembly.
Another
agreement in India is with Dynamatic Technologies, and Airbus has made the
Bangalore-based company the single-source supplier of flap-track beams for the
wide-body A330 family. Others, such as IT giant Infosys,
help mmanufacturers worldwide to take advantage of the talent pool in India.
“So when you are doing some part of manufacturing or real ‘Make in India,’ you
need integration, IT and intelligence to be integrated together, and
that is how we are facilitating…[by] bringing to manufacturers the quality and
knowledge horsepower of India to bind the things together,” said Nits Bansal,
vice president of manufacturing for Infosys.
LEVEL PLAYING FIELD
To
enable OEMs to commit long-term capital to India and to establish/expand
their presence in the country, “It is imperative the emerging policy framework
provides for integration of their manufacturing footprint in India into their
global supply-chain network. The larger objective of making it easy to do
business in India will be achieved when the government is able…[to] alleviate
concerns around foreign direct investment, investor protection, land
acquisition, licensing issues [and] taxation regime,” said a report by law firm
Khaitan & Co.
“We
have to create a level playing field to drive the private sector…Exports need
to liberalize…[and] certificates for exports take too long…,” acknowledged
Amitabh Kant, Secretary, DIPP (the Department of Industrial Policy& Promotion).
Defense
manufacturing in India is undergoing a transition from a traditional
buyer-supplier relationship to a more open and transparent one. Easing of
licensing policy, an increase in foreign direct investment from 26 to 49
percent and a forecast that envisions a 10-fold increase in exports (presently
at a miniscule 0.3 percent) are drivers propelling a defense sector currently
riding high on the “Make in India” program. The initiative was launched and
promoted widely by new Prime Minister Narendra Modi.
An
attempt to boost GDP, Make in India
sees aerospace and defense (among other industries) as its focus to enhance
skill development and build an efficient manufacturing infrastructure.
Transparent policies and speedy implementation are also vital ingredients.
“MAKE IN INDIA”
Since
India’s defense requirements are largely based on imports, Make in India
encourages private-sector participation and alliances with OEMs for internal use and to
bolster exports. As India’s procurement gets a kick start with mega projects
such as the 36 Dassault Rafales, M777 ultra-light howitzers, medium
transporters and light utility helicopters, among others, opportunities are
increasingly opening up for aviation- and defense-product manufacturing and
supply-chain sourcing.
Defense
offsets are expected to generate $4 billion over the next eight years. The
policy (which stipulates the mandatory offset requirement of a minimum 30
percent for procurement of defense equipment), once introduced in capital
purchase agreements with foreign defense players, should ensure that an
eco-system of domestic suppliers grows rapidly.
“The Make in India policy
has thrown open a new arena of opportunities for businesses…the imperative to
innovate, driven largely by global opportunities,” said Samir Yajnik, president
of sales, Asia Pacific, and COOAsia Pacific
at Tata Technologies (Hall 4 B84, Hall 3 B80). “Intense competition and
technological advances are leading to a need to tap global knowledge resources.
This will better assist in shortening production cycles and reducing development
costs, while allowing products to be developed for local market with differing
customer preferences, geographic conditions or regulatory requirements,”
he said.
Tata
Technologies has a joint venture with government-owned Hindustan Aeronautics
Ltd (HAL,
Chalet 128). Tata HAL Technologies addresses the entire
virtual value chain for aerostructures and related aero systems. Based in
Bangalore, the JV delivers engineering, design,
optimization, and manufacturing solutions for major aerospace OEMs and Tier 1 suppliers in North
America and Europe.
Under
the twin pressures of financial austerity and environmental constraints, frugal
innovation will become critical over the next few years, said Yajnik. “For
example, the Indian aviation industry is expected to show significant growth,
which will usher in opportunities in the maintenance, repair and overhaul [MRO],”
he added.
“Indian aerospace is
leapfrogging into a new era of strategic autonomy,” added Air Vice Marshal S.J
Nanodkar, assistant chief of air staff, operations. However, glitches remain in
the policy. In an effort to streamline defense procurements, the Ministry of
Defense is set to make changes in the soon-to-be-announced Defense Procurement
Procedure (DPP)
2015. A major change expected is the option to migrate from offset obligations
to a ‘Buy and Make’ category, where products being manufactured in India will
be considered as meeting offset obligations, providing a boost to ‘Make
in India.’
“I want our offsets policy
not as a means to export low-end products, but to acquire state-of-the-art
technology and skills,” said Modi. The new policy draft, that AIN has reviewed, says that transfer of
technology (TOT)
will be made to the Defense Research & Development Organization (DRDO) so that it
can assess the demands on the industry. “This is a bit far-fetched. The role of
the OEM ends once TOT is done, and why should DRDO decide which Indian Production Agency
should receive the technology?” a private sector official told AIN.
“There is also the question
of liability. We need the OEM to share liability for the product
that comes under TOT,” said Puneet
Kaura, chairman and managing director, Samtel Group, which recently signed a
cooperation agreement with General Dynamics to co-produce digital displays in
India for a range of military and non-military vehicles worldwide. Samtel has a
lot at stake. It has supplied display shipsets for 500 civilian aircraft, via
Honeywell, and hopes to export about 1,000 shipsets by next year. More than 100
Indian Air Force Sukhoi Su-30 fighters are fitted with Samtel displays. “We
have also gotten into the electronic warfare area which we have started to
develop with a foreign partner,” said Kaura. Moving forward, Samtel is looking
at multiple line replaceable units (LRUs).
A
request by the industry to include services in the policy has not been acted
upon yet. “This puts MRO off the list,” said the official.
On
reforms in the offsets policy, Modi has said candidly: “I am acutely aware that
it still needs a lot of improvements. We will pursue them in consultation with
domestic industry and our foreign partners.”
“Unfortunately, some
official in the MoD has just done a ‘cut and paste’ on Modi’s announcements
without seeing the practical aspects,” said an industry official.
C-295S IN INDIA
During
Modi’s visit to Toulouse in April, Airbus Group (Hall 17, Stand C4) CEO Tom Enders said, “India already takes
a center-stage role in our international activities and we want to increase its
contribution to our products. We support Prime Minister Modi’s ‘Make in India’
call and are ready to manufacture in India, for India and the world.”
“Land, labor and capital are
essential for the Make in India campaign,” said Arijit Ghosh, president of
Honeywell Aerospace in India (Chalet 100). A focus on developing an entire
learning ecosystem around aeronautics and training would, “boost capabilities
of domestic employees and suppliers,” he added. In partnership with Tata (Hall
4, Stand B84), Ghosh said the first phase
this year of the licensing agreement with Tata Power’s strategic engineering
division to produce Honeywell’s tactical advanced inertial navigator (TALIN) in India
will include production kits, training and expertise to assemble the system.
“By 2016, we plan to move into the second phase where Tata Power manufactures
these build kits under license from Honeywell,” said Ghosh.
Airbus
Defense & Security, which has emerged as a
single vendor for India’s medium transport bid, has linked up with Tata
Advanced Systems Ltd to produce C-295s in India. It is also active in aerospace
manufacturing, having 35 suppliers working across the Airbus supply chain,
contributing $400 million to turnover in 2014. “Every Airbus program is now
partly made in India,” said Dwarakanath Srinivasan, managing director of
Airbus India.
Airbus
has 196 commercial passenger aircraft flying in India, a fleet that creates
further opportunities. “Airbus has been a major driver for commercial aerospace
manufacturing in India in the past decade,” said Aravind Melligeri, CEO of Aequs, which manufactures landing
gear components and ships them to Airbus for final assembly.
Another
agreement in India is with Dynamatic Technologies, and Airbus has made the
Bangalore-based company the single-source supplier of flap-track beams for the
wide-body A330 family. Others, such as IT giant Infosys, help mmanufacturers
worldwide to take advantage of the talent pool in India. “So when you are doing
some part of manufacturing or real ‘Make in India,’ you need integration, IT and intelligence to be integrated
together, and that is how we are facilitating…[by] bringing to manufacturers the
quality and knowledge horsepower of India to bind the things together,” said
Nits Bansal, vice president of manufacturing for Infosys.
LEVEL PLAYING FIELD
To
enable OEMs to commit long-term capital
to India and to establish/expand their presence in the country, “It is
imperative the emerging policy framework provides for integration of their
manufacturing footprint in India into their global supply-chain network. The
larger objective of making it easy to do business in India will be achieved
when the government is able…[to] alleviate concerns around foreign direct
investment, investor protection, land acquisition, licensing issues [and]
taxation regime,” said a report by law firm Khaitan & Co.
“We
have to create a level playing field to drive the private sector…Exports need
to liberalize…[and] certificates for exports take too long…,” acknowledged
Amitabh Kant, Secretary, DIPP (the Department of Industrial Policy& Promotion).
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