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By Debi Prasad Sarangi,

It is ‘the best of times’ to be in the Indian Aerospace Industry. It is ‘the spring of hope’ as we are witnessing a lot of activity that has the potential to put India on the world map as a leading market as well as sourcing destination. The massive and ambitious modernization plans of the three Services, namely the Air Force, the Army and the Navy, that will involve indigenous design & manufacture as well as a lot of licensed manufacture. In addition, the country is also witnessing a surge in the field of civil aircraft programs. Let us analyze what it means for the Indian Aerospace industry.

When we talk about indigenous development, what comes first to mind is the Light Combat Aircraft (LCA) Tejas. The project LCA started with Rs 560 crore in 1983. However, with the Go last year sanctioning the extension of full scale engineering and development, the estimate of the project has touched a whopping Rs 13,000 crore till the end of 2018. Of course, the estimate includes the expenses to be incurred on MK 2 and its Navy variants. In addition, HAL is set to produce 40 Mk 1 aircraft starting from 2011 to 2014. HAL plans to ramp up the production to 20 Mk 2 aircraft subsequently. Another project is the Hindustan Jet Trainer-36 (IJT). HAL has an order for the production of 72 aircraft over a period of next five years. In addition, there are helicopter programs such as the Advanced Light Helicopter (ALH- Dhruv) (total of 500 ordered) and Light Combat Helicopter (LCH) (65) under production.

There are likely to be Joint Venture projects such as Light Utility Helicopter (LOH), Medium Lift Helicopter (MLH), Fifth Generation Fighter Aircraft (FGFA) and Multi-role Transport Aircraft (MTA). The last two projects are with Russia.

There are also a large number of projects for licensed manufacture, the biggest of them being the much-talked about Mutli Role Combat Aircraft (MRCA). This is pegged at Rs 42,000 crore, which is considered as the biggest deal ever in the History of Indian defense purchases. The initial order would be around 128 aircraft, which may later extend to nearly 200. There are likely to be other projects such as Basic Turboprop Trainer (Pilatus PC7).

On the Civil aircraft side, we have projects such as SARAS and National Civil Aircraft(NCA), led by National Aerospace Laboratory.

Thus we see a large number of programs for manufacture in the country. It is obvious that all these manufacturing activities cannot be handled by HAL alone, how ever much, the facilities available there are ramped up. There is definitely a large share for private players in this game.

In addition to indigenous manufacture and licensed manufacture programmes, there would be aircraft to be bought directly such as military transport, tankers, etc. Any overseas supplier who supplies defence related goods to India will be obliged to commit 30 percent offset. This means that the supplier will be required to buy goods/engage in manufacturing /or setting up JVs with Indian companies to the extent of 30 percent of the total order.

This will help in increasing the indigenous capability while at the same time, creating new jobs, infrastructure and expertise in the state of the art technologies. As the foreign vendors would have the liberty to choose among PSUs and private players, the private players do have a chance to get their share out of this deal.In view of the enormous potential of the Indian aerospace market, a number of overseas companies are now actively engaged in setting up JVs, captive centers and Offshore Development Centers to take advantage of the offset requirements. This will no doubt give a boost to the design as well as manufacturing activities of high technology aircraft.

There are already a large number of big players in the private sector working on support activities for design and manufacture of Aerospace products. This is likely to grow in the coming years. A larger number of smaller players are also likely to join in the party. Make hay while the sun shines.

(Debi Prasad works in Ignis Technologies. He is a journalist by training and loves to write on issues close to is heart. The views expressed here are of the author and does not reflect that of Ignis or Dare.)

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