Shifting Dynamics Of Indian Aerospace Sector

Abstract: Time was when the state owned aerospace major, Hindustan Aeronautics Limited(HAL) was synonymous with the Indian aerospace sector. However, with the private sector entities making rapid forays in defence and aerospace manufacturing, HAL no longer enjoys the monopoly over the Indian aerospace sector. Indeed, dedicated aerospace parks and Special Economic Zones(SEZs) are proving to be game changers and force multipliers for the Indian aerospace sector.

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The Indian aerospace sector, which, for long, was a tightly held monopoly of the state-owned aeronautical giant Hindustan Aeronautics Limited (HAL),is slowly showing signs of resurgence with a number of private entities working towards acquiring a range of manufacturing capabilities and technological expertise that were hitherto either not available or difficult to come by within the country. Ample proof in support of the changing contours of the Indian aerospace sector was provided by the opening of the country’s largest aerospace machining facility at Aequs aerospace SEZ at the quiet Hattargi village on the outskirts of Belagavi in Karnataka. Inaugurating this custom-built  facility on 7^th September 2015,meant to  exclusively supply aerospace machined components and sub-assemblies to the European aircraft major Airbus Industries, India’s Defence Minister ManoharParrikar, said that he was delighted to see Indian companies creating value in the global  aerospace industry and supporting the Make in India initiative. Parrikar was quick to note that with the kind of facilities that privately-owned entities like Aequs putting in place,India should not find it difficult to meet most of its requirements in defence and aerospace sectors domestically.

     With the Indian Government creating conditions conducive for large-scale participation of private sector companies in defence and aerospace manufacturing , Indian aerospace entities in the private sector can  definitely  look forward to surge ahead  by wiping out the six decades long “slackness and lost opportunities”.Indeed ,Aequs Aerospace SEZ set up in 2009 as India’s first fully operational aerospace SEZ with a thrust on precision manufacturing  has covered much ground in giving a practical shape to the Make in India  initiative of the  Indian Prime Minister Narendra Modi by acquiring new capabilities through joint ventures. The state of the art aerospace machining facility at Aequs SEZ comprising 150 Computerised Numerical Control (CNC) machines and representing an investment of US$150-million over a period of five years will be in a position to generate a revenue to the tune of US$75-million per annum when operated at its peak capacity. In this context, Aravind Melligeri, Chairman and CEO of Aequs points out “This aerospace machining facility underscores our commitment to the global aerospace industry and 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”. Melligeri is clear in his perception that the Indian aerospace industry should move up the value chain by displayingits capability to supply fully finished, high value products, systems and service support. But at the same time, he drives home the point that adherence to quality and delivery schedule could alone help the Indian aerospace industry to remain a globally competitive enterprise. Large initial investment, long gestation periods and the capacity to retain human talent are some of the factors that should be factored in by the aerospace industry, says Melligeri.

Incidentally, Aequs which has the distinction of being the first Indian private entity to emerge as a tier-one supplier to Airbus Industry, is aiming to create a full-fledged aerospace ecosystem wherein a customer can source all his requirements under one roof and in the process save time, money and efforts involved in sourcing from a variety of points spread across the world. To this end, Aequs is focussing on creating facilities and introducing processes that are currently new to the Indian aerospace industry. Aequs seeks to achieve this objective by floating joint ventures with industrial partners possessing the relevant know-how and expertise.

 As it is, Aequs Aerospace created a new milestone in high precision aerospace forging by commissioning a 10,000-tonne capacity hydraulic forging press in 2014. This closed-dye, hydraulically-operated hot forging press set up by SQUAD Forging India, a tripartite  joint venture between Setforge, Aequs as well as Aubert &Duval, happens to be the largest of its kind in the country. This innovative facility is being pressed into service to forge larger aircraft parts including landing gear and various actuation parts besides structural parts weighing upto 400kg. Till now, the aerospace customers in the country had to look beyond India towards advanced industrialized countries for meeting their requirements in this category.For no other Indian enterprise boasts of such a facility. Interestingly, while developing the Kaveri power plant meant to propel India’s fourth generation fighter aircraft Tejas, Bangalore based Gas Turbine Research Establishment (GTRE) had to look beyond the borders of India for the kind of metallic forgings that Aequs is now capable of delivering.

Similarly, Aerospace Processing India(API),a joint venture between Aequs and Magellan Aerospace, operating out of Aequs SEZ,has achieved the distinction of being the first Indian outfit to set up a Tartaric Sulphuric Acid(TSA) anodizing line approved by Airbus Industries.This latest genre, eco-friendly facility replaces the  hazardous  chromic acid analyser.

Further into the future, Aequs is looking at setting up a sophisticated casting facility and creating an advanced infrastructure for the production of aero engine components.Aequs Aerospace, which is now focussing on producing aero structures including parts of wings and landing gear, is keen to position itself as a supplier of fully-integrated subsystems and structural assemblies for global aircraft majors in the years ahead. Clearly and apparently, the idea is to turn Aequs Aerospace into a leading player in the global aerospace supply chain.

The pro-active and industry-friendly initiatives of the Government, which appear fully committed to Indian defence self-reliance, may just have facilitated these dedicated aerospace parks and SEZs that are slowly mushrooming across the country. These exclusive aerospace parks and SEZs provide the necessary level of synergy required to take the Indian aerospace sector to the next level of growth and position India as a major aerospace outsourcing destination.For instance, the aerospace SEZ at Adibatla village near to Hyderabad houses the joint ventures that Tata Advanced Systems Ltd(TASL)has floated with the  global aerospace majors, Lockheed Martin and Sikorsky. On another front, Swiss-German aerospace enterprise Ruag Aviation, the producer of the Dornier-228 new generation aircraft, is investing Rs.40,000 million to manufacture Dornier-228 fuselage and wings in tie up with TASL. Further,the Switzerland based Pilatus Aircraft which is now implementing a contract to supply75 PC-7MKII basic  trainer aircraft to the Indian Air Force(IAF)has joined  hands with TASL for the production of  aero-structures of the business aircraft PC-12 here.

The global aerospace giant, Boeing has also entered into a pact with TASL for defence and aerospace manufacturing as part ofthe Make in India initiative. This agreement covers co-production of aero structures and collaboration on developing integrated systems  including unmanned aerial  vehicles(UAVs). As it is, TASL has already on hand a contract for manufacturing aero-structures for Boeing’s CH-47 Chinook and AH-61 helicopters. Not surprisingly then, spurred on by the potentials of Hyderabad to provide momentum to the Indian aerospace sector, the Telangana Government is planning to set up a second aerospace park covering an area of 1000 acres at Elimenidu village  on the outskirts of Hyderabad.

Not willing to left behind in the race for the lucrative business opportunities offered by the aerospace sector, the neighbouring state of Tamilnadu has cleared the decks for the setting up of an integrated defence and aerospace park in the thriving auto hub of Sriperumbudur, about 50-kms from Chennai. When fully functional, this park will accommodate thirty aerospace firms. On the other hand, Anil Ambani led Reliance Group, which has unveiled an ambitious plan to make it big in India’s aerospace  sector, is working towards setting up an aerospace park at Mihan(Multi-modal International Cargo Hub and Airport at Nagpur) SEZ in Nagpur.This aerospace park involving an investment of Rs.65,000-million will initially focus on  aero structures. This is claimed to be the largest green-field project not only in India but also in the entire South East Asia region.

Against this backdrop, a joint study by the industry body ASSOCHAM and the consulting firm Price Waterhouse Cooper says “The supply base capabilities in quality and delivery coupled with the trained and certified manpower will be the catalyst for the ecosystem to rapidly build up in the aerospace sector, both military and commercial”. 

The author is a freelance writer on subjects related to national security and aerospace. Views expressed are personal.