Global Aerospace Majors Invade Indian Market

Leading global aerospace giants from the United States and Europe are vying to expand their footprint in India through engineering and technology operations as well investments in new factories and R&D facilities.

India is also emerging as a hub for engineering and design services for multinationals.

Foreign collaborations with private and public domestic players are in the pipeline for manufacture of aero components as well as Maintenance, Repair and Overhaul (MRO) facilities for the civil and military aviation sectors.

The Boeing Co., the Seattle, Washington-based aerospace giant, also recently announced expansion of its engineering and technology operations in India to focus on data analytics, avionics, design, testing and research. The American multinational says it is favorable to building an innovative aerospace ecosystem and is also considering partnering with the Civil Aviation Ministry and Air India Engineering Services Ltd to develop an accelerated apprentice program for aircraft maintenance engineers improve their employability.

Pratyush Kumar, the president of Boeing India, recently told The Times of India that the company in India is now increasingly focused on scaling up manufacturing through partnerships and engineering.

"When it comes to manufacturing, we have increased our sourcing by four folds over the past three years,” Kumar said. “This year, we expect this number to go beyond US$1 billion." The company, which is targeting Hyderabad and Bangalore as its aerospace hubs, has also won Indian Army orders for 22 Apache and 15 Chinook helicopters.

Long a provider of software tools for efficient airspace management and decongestion at airports across India, the company has established the Boeing Research and Technology India Center in Bangalore as the Indian counterpart to its US research and technology organization. Boeing, the world's largest airframe manufacturer is also competing with Lockheed Martin to produce fighter jets in India and provide a fleet of 126 of such craft under its Medium Multi-Role Combat Aircraft (MMRCA) program.

Lockheed Martin, headquartered in Bethesda, Md., isn’t far behind. It anticipates scaling up its India operations and expects to shift its fabrication units for India production from the US. It plans to set up an engineering lab to enhance its research and innovation support in India.

The multi-billion-dollar US firm, which has delivered a dozen C-130 cargo aircraft, is also vying to sell helicopters and F-16 aircraft to the Indian Air Force. Through a joint venture with the Tata Group, it has brought manufacturing of the important tail section of the C-130 Hercules aircraft to its facilities in Adibatla on the outskirts of Hyderabad.

Lockheed Martin and Boeing are also in talks with the Defense Ministry for the possible production of F-16 Super Viper and FA-18 Super Hornet fighter jets in India, analysts say.

Aircraft manufacturers such as the EU’s Airbus SE and Canada’s Bombardier Inc. are also making Indian companies part of their global supply chains. Airbus’ largest Indian partner is Hindustan Aeronautics Limited which produces half of the A320 family’s forward passenger doors. Similarly, Tata Advanced Material Limited has been providing composite parts for Airbus’ A320.

A growing network of small and medium-sized Indian companies, like CIM Tools, Gardner-Pranitha, Triveni and Sansera Aerospace have been establishing synergies with foreign players. Hyderabad-based Cyient has supported a number of design-engineering projects for Boeing airplanes, and currently provides design and stress support on the 747-8 Freighter and the 787-8 and 787-9, a company official told AS.

“Aerospace companies are keen to partner with Indian firms as suppliers of high value components, and eventually as assemblers of aircraft. The low-cost production costs India brings to the table are a big lure for them," said defense analyst Prateek Kakkar, formerly with DRDO, the country's premier defense research company.

Kakkar added that the robust growth of India’s aerospace industry is also illustrative of the fact that the country is rapidly building up capabilities to emerge as a preferred destination for the global A&D supply chain.

"With the government opening up and providing increased opportunities to the private sector, many global and domestic players are collaborating with Indian entities and having joint ventures for manufacturing, engineering and design services," elaborates Kakkar.

However, the increased forays of foreign players into the Indian market have triggered criticism about the government giving precedence to them over domestic ones. The critics also point out that unlike Germans and the Japanese, who ensure they are partners in their foreign collaborations, India is content to be a low-cost service provider. When will the Indian industry develop wings of its own? they ask.

The government counters this argument by pointing out that its current policies will – in the long and medium term – create a thriving ecosystem to spur the growth of domestic industry. Officials argue that the government's "Make in India" initiative will form the bedrock for the expansion and growth of India's aerospace and defense industry while encouraging airframe manufacturers to tap into the services of aerospace suppliers based within the country. The initiative also aims for a certain percentage of the aircraft to be produced in India.

"Make in India is also facilitating synergies between local private and public players with foreign companies," a ministry of Defense official told Asia Sentinel, giving several examples including Aequs, a precision aerospace sheet metal fabrication, assembly and forging aerospace supplier for Airbus, Boeing, and other manufacturers. The company also became the first Indian-based aerospace manufacturer to expand to North America by acquiring Texas-based T&K Machine. In 2016, it acquired the French landing gear and engine test manufacturing company, the SIRA Group.

Defense experts say that the country's aerospace sector, hitherto dominated by lumbering state-owned enterprises, finally is poised for the entry of more nimble private players while aiming to find a strong foothold in the global supply chain of foreign aerospace majors.

Neeta Lal, a Delhi-based editor & journalist and a longtime contributor to Asia Sentinel, tweets at neeta_com