With ‘Make in India’ the new mantra, NEELAM MATHEWS reports on the
advent of the private sector in India’s aerospace industry
(Aerospace UK)
A decade of policy paralysis is giving a new ray of hope to the sluggish Indian aerospace industry — until recently dominated by slothful staid public sector companies plagued with delays with neither the will, nor the inclination to innovate or move forward. Driven by the promised speedy and transparent policy for aerospace manufacturing by the, now over one year old, Narendra Modi Government, that has made ‘Make in India’ its mantra, the entry of private sector into forbidden territory is changing the very dynamics of the business. While there remains a slip between the cup and the lip, $30bn worth of contracts cleared by the Defence Acquisition Council (DAC) in the past year are awaiting release of Request for Proposal (RFP) that, in theory at least, needs to be closed within a year. The new defence procurement policy once announced, it is hoped, will ring in a new age in the country’s manufacturing ecosystem from the present low grade component manufacturing, moving up the value chain to high-tech products. The new policy envisages that, in future, RFP for large procurement will nominate platforms in advance which will then have to be under the Make in India programme. While the prime will be an Indian company, it will be the OEM that will choose the best company with the lowest cost it deems fi t to produce its product in India. “Unlike the present Defence Procurement Policy (DPP) 2013, that puts
the liability of equipment manufactured on the prime that is an Indian company — DPP 2015 mandates that the two partners share the risk jointly… New guidelines will also ensure that the military will have its choice of equipment and qualitative requirements which are often changed midway, will be clearer from the start,” said a defence ministry offi cial to AEROSPACE. Building Tier 1 competence “There is substantial capability being created at Tier 2 level from simple to complex geometrics for aerostructures in India,” said Rahul Gangal, Global Partner, Roland Berger Strategic Consultants, to AEROSPACE. He added while Tier 1 development is happening for rotary wing, private sector participation for fi xed wing aircraft appears to be 18-22 months away with the Airbus-Tata partnership for the Avro replacement programme with the C-295, that will become “A milestone program for building Tier 1 fi xed wing competence.” Even the Russians are changing their fi delity, moving away from government-owned companies to service and manufacture their equipment. Privately owned Reliance Defence will produce Kamov Ka-226T helicopters in a joint venture following a government-to-government deal for procurement of 40 fl yaway and production of 160 Kamov Ka-226T helicopters. Spread across 86 acres, the facility includes a helicopter assembly and components manufacturing at Nagpur airport in the Western state of Maharashtra, at the Relianceowned Dhirubhai Ambani Aerospace Park. The contract, once it has been signed at the Russia-India annual summit in December, will make Reliance the country’s fi rst private helicopter manufacturing facility, and it will ready by early 2017. India’s large and medium private companies have already made their presence felt and are attracting business from western OEMs. Those that stand out include Tata Group, Dynamatic Technologies, Larsen & Toubro, Axis, Aequs, Samtel Avionics and Mahindra Defence Systems. Too fragmented? Things are not easy. A common refrain is that aerospace manufacturing in India is fragmented. “The only high-tech project in India that is closest to call is the Light Combat Aircraft Mk1 that has 80% foreign parts. There is an anomaly in the policy that expects 60% of indigenous content. If barely 20% of aircraft parts for an aircraft made in India are indigenous, how does the government expect 60% to be sourced in India?,” said an engineer. “Aerospace requires R&D and the private sector is not interested in investing in it, as it is a chicken and egg situation. Without contracts who will want to put in the money?” He cites the example of a contract to HAL for 187 reconnaissance and surveillance light helicopters even as its fi rst fl ight has been delayed despite the design being based on an existing model built under licence, the Advanced Light Helicopter, Dhruv. “If you cannot remodel the existing model, what kind of player are you?” adding “We couldn’t make a basic trainer and are now attempting to build a fi fth generation fi ghter aircraft.” However, today, few can deny that HAL, working on numerous aircraft greenfi eld projects, no longer holds a monopoly. Increasingly, component sourcing and high value projects are moving towards private companies where trust and reliability is the primary factor, given that India’s Foreign Direct Investment is limited to 49%, where the OEM does not have an equal nor controlling stake. While Tata Advanced Systems (TASL) has already established joint ventures (JVs) with US companies Lockheed Martin and Sikorsky to produce Lockheed Martin C-130 Hercules empennage and centre wing-box structures, and cabins for the Sikorsky S-92 medium-lift helicopters, it is the almost invisible but high-tech up-the-value-chain manufacturing that is starting to gain attention of Western OEMs. Growing avionics expertise “Strong suppliers who possess economies of scale in their cost structure and have the balance sheet strength to invest in risk sharing programmes will.......Much much more in Aerospace.........
(Aerospace UK)
A decade of policy paralysis is giving a new ray of hope to the sluggish Indian aerospace industry — until recently dominated by slothful staid public sector companies plagued with delays with neither the will, nor the inclination to innovate or move forward. Driven by the promised speedy and transparent policy for aerospace manufacturing by the, now over one year old, Narendra Modi Government, that has made ‘Make in India’ its mantra, the entry of private sector into forbidden territory is changing the very dynamics of the business. While there remains a slip between the cup and the lip, $30bn worth of contracts cleared by the Defence Acquisition Council (DAC) in the past year are awaiting release of Request for Proposal (RFP) that, in theory at least, needs to be closed within a year. The new defence procurement policy once announced, it is hoped, will ring in a new age in the country’s manufacturing ecosystem from the present low grade component manufacturing, moving up the value chain to high-tech products. The new policy envisages that, in future, RFP for large procurement will nominate platforms in advance which will then have to be under the Make in India programme. While the prime will be an Indian company, it will be the OEM that will choose the best company with the lowest cost it deems fi t to produce its product in India. “Unlike the present Defence Procurement Policy (DPP) 2013, that puts
the liability of equipment manufactured on the prime that is an Indian company — DPP 2015 mandates that the two partners share the risk jointly… New guidelines will also ensure that the military will have its choice of equipment and qualitative requirements which are often changed midway, will be clearer from the start,” said a defence ministry offi cial to AEROSPACE. Building Tier 1 competence “There is substantial capability being created at Tier 2 level from simple to complex geometrics for aerostructures in India,” said Rahul Gangal, Global Partner, Roland Berger Strategic Consultants, to AEROSPACE. He added while Tier 1 development is happening for rotary wing, private sector participation for fi xed wing aircraft appears to be 18-22 months away with the Airbus-Tata partnership for the Avro replacement programme with the C-295, that will become “A milestone program for building Tier 1 fi xed wing competence.” Even the Russians are changing their fi delity, moving away from government-owned companies to service and manufacture their equipment. Privately owned Reliance Defence will produce Kamov Ka-226T helicopters in a joint venture following a government-to-government deal for procurement of 40 fl yaway and production of 160 Kamov Ka-226T helicopters. Spread across 86 acres, the facility includes a helicopter assembly and components manufacturing at Nagpur airport in the Western state of Maharashtra, at the Relianceowned Dhirubhai Ambani Aerospace Park. The contract, once it has been signed at the Russia-India annual summit in December, will make Reliance the country’s fi rst private helicopter manufacturing facility, and it will ready by early 2017. India’s large and medium private companies have already made their presence felt and are attracting business from western OEMs. Those that stand out include Tata Group, Dynamatic Technologies, Larsen & Toubro, Axis, Aequs, Samtel Avionics and Mahindra Defence Systems. Too fragmented? Things are not easy. A common refrain is that aerospace manufacturing in India is fragmented. “The only high-tech project in India that is closest to call is the Light Combat Aircraft Mk1 that has 80% foreign parts. There is an anomaly in the policy that expects 60% of indigenous content. If barely 20% of aircraft parts for an aircraft made in India are indigenous, how does the government expect 60% to be sourced in India?,” said an engineer. “Aerospace requires R&D and the private sector is not interested in investing in it, as it is a chicken and egg situation. Without contracts who will want to put in the money?” He cites the example of a contract to HAL for 187 reconnaissance and surveillance light helicopters even as its fi rst fl ight has been delayed despite the design being based on an existing model built under licence, the Advanced Light Helicopter, Dhruv. “If you cannot remodel the existing model, what kind of player are you?” adding “We couldn’t make a basic trainer and are now attempting to build a fi fth generation fi ghter aircraft.” However, today, few can deny that HAL, working on numerous aircraft greenfi eld projects, no longer holds a monopoly. Increasingly, component sourcing and high value projects are moving towards private companies where trust and reliability is the primary factor, given that India’s Foreign Direct Investment is limited to 49%, where the OEM does not have an equal nor controlling stake. While Tata Advanced Systems (TASL) has already established joint ventures (JVs) with US companies Lockheed Martin and Sikorsky to produce Lockheed Martin C-130 Hercules empennage and centre wing-box structures, and cabins for the Sikorsky S-92 medium-lift helicopters, it is the almost invisible but high-tech up-the-value-chain manufacturing that is starting to gain attention of Western OEMs. Growing avionics expertise “Strong suppliers who possess economies of scale in their cost structure and have the balance sheet strength to invest in risk sharing programmes will.......Much much more in Aerospace.........
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