Indian Defence Review

The India joint venture established between TASL and Sikorsky Aircraft Corporation (now acquired by Lockheed Martin) has been producing S-92 helicopter cabin in India since 2012 and the project has been 100 per cent indigenous since 2013. The India operation assembles cabins and also produces all parts needed for the assembly, before shipping the cabins to the US for aircraft completion and customer delivery. The S-92 helicopter cabin and more than 5,000 associated precision components are made at Hyderabad through a strategic collaboration between Sikorsky and TASL. In pursuit of the ongoing proposal to provide for 110 single-engine fighters for the IAF, TASL has entered into a partnership with Lockheed Martin in a bid to produce the F-16 in India and Adani Group hopes to produce the Saab Gripen.

Reliance Group (Anil Ambani) is an important entrant in the defence and aerospace sector and has obtained 27 industrial licenses for the defence subsidiaries of its company Reliance Infrastructure Ltd. (R-Infra) for making helicopters, aircraft, missiles and UAVs among others. Reliance Defence Limited, another Reliance Group company, has set up the Dhirubhai Ambani Aerospace Park spread over 400 acres at Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) planned with an aim to create a comprehensive eco-structure through backward integration for indigenous manufacturing of aerospace components. Its long term plans include creation of a centre of excellence in aerospace structures, engine design and manufacture, fabrication and platform integration, development of UAVs and an aerostat segment. It has signed an agreement with the Ukraine-based, state-run Antonov Company for cooperation on a 50 to 80-seater transport aircraft for military, para-military and civil use. The plan is to manufacture the aircraft at MIHAN.

The Mahindra Group entered the aerospace industry in 2008, through its company Mahindra Aerospace and acquired Gipps Aero and Aerostaff (both Australian entities) in 2010. Indeed, it is the first one in India to go into full aircraft production, albeit a small one (Airvan 8/10) and that too, outside India. Airbus has shown interest in having the company forge aircraft parts in India for some Airbus aircraft. With manufacturing in Australia and India, it has inked sourcing and partnering deals with aerospace majors such as Premium Aerotec and GE Aviation. Mahindra Defence has also signed a “statement of intent” with Airbus Helicopters for forming a joint venture to produce military helicopters in India.

Bharat Forge is another company that Airbus is looking at to have some of its aircraft parts forged in India as the next logical step to expanding its supplier base and outsourcing activity in a fast growing market. Bharat Forge already has a similar arrangement with Boeing wherein it is supplying titanium flap-track forgings for Boeing 737 NG (a first for any Indian company) and will be supplying the same for the 737 MAX. Bharat Forge Limited has also entered the aerospace sector by signing four contracts. It has also entered into an agreement with Rolls-Royce Plc to supply critical and high integrity forged and machined components for a range of aero-engines including Rolls-Royce’s flagship Trent engine.

Another company worthy of mention here is Dynamatic Technologies which partners Ministry of Defence and HAL, as well as major international aerospace companies. Dynamatic-Oldland Aerospace, India, produces the wing and rear fuselage of Lakshya – India’s Pilotless Target Aircraft, the ailerons and wing flaps for the Intermediate Jet Trainer HJT-36 and major airframe structures for the Sukhoi Su-30 MKI besides working closely with EADS and Spirit AeroSystems to assemble Flap Track Beams for the Airbus single-aisle A-320 family of aircraft on a Single Source basis. The manufacture of a functional aero-structure of a major commercial jet by a private sector company is laudable and demonstrates the potential for ‘Make In India’ given the right conditions and the right environment.

In real terms, private sector participation is meagre and largely oriented towards meeting small, piecemeal requirements of global OEMs. Even after private companies manage to make significant headway into ‘Make In India’ manufacturing, it will take them possibly a decade or more to build the infrastructure and to absorb the technologies involved. Airframe and structural requisites would not be very difficult to master, but power plant technology would remain elusive for longer periods due to its more complex nature and due to the time lost so far by HAL and our R&D in that field led by Gas Turbine Research Establishment (GTRE). The ideal solution would be for private participation in a joint venture with a leading edge aircraft and engine manufacturer which includes provisions for Transfer of Technology.

The offers of SAAB and Lockheed Martin to build modern combat aircraft in India are possible opportunities, to be weighed against other considerations – economic and political. In the case of the Rafale deal, pruned down from 126 to 36 aircraft, Dassault Aviation has already made it clear to India that it will not be able to go for full Transfer of Technology and create an industrial eco-system by manufacturing the planes here under the ‘Make In India’ programme unless it is given an order for at least 100 aircraft. The much hyped up offsets associated with the Rafale deal, when looked at incisively, reveal that the aerospace technology transfer content is non-existent.

Given the opportunity, private enterprise is certain to outdo PSUs in the aerospace arena. If India is to achieve the status of an aerospace power, it has to radically alter its perception and treatment of aerospace players in the private sector. The first step in this direction is the provision of a level playing field for private and public sector players in the aerospace industry. The private entities mentioned above are the major ones involved in the aerospace industry. There are others too, but full-blooded  private sector participation is yet to come about.

Concluding Remarks

According to Stockholm International Peace Research Institute (SIPRI) 2018 Year Book, India is the largest importer of major weapons with a whopping 12 per cent of the global share. However, ‘Make In India’ has so far not done much to redress that situation. Indeed, some policies of the government tend to be regressive. As an illustration, in June last year, it decided to shift some high technology, complex systems from ‘Make’ category to ‘Make 2’; the implication was that while in the ‘Make’ category, the MoD was financing development costs, under ‘Make 2’ the private entities will have to bear their own costs of development. It is difficult to defend this government decision at a time when there is so much noise about a level playing field for private and public sectors.

Speaking at the Military Literature Festival last December, Former Chief of the Army Staff, General VP Malik (Retd) had lamented that a nexus between MoD bureaucrats and Defence PSUs was causing harm to the private players’ interests and that there was no indication that the government wanted private players to ‘Make In India’.

At the time of writing this, there are reports that, in a confounding move, nearly four lakh defence personnel belonging three major defence unions, namely, the All India Defence Employees Federation (AIDEF), Indian National Defence Workers Federation (INDWF) and the Bharatiya Pratiraksha Mazdoor Sangh (BPMS) have resolved to launch an indefinite strike between January 23 and 25, 2019, to express their discontent over moves to privatise the defence sector. The decision is a manifestation of the malaise that threatens privatisation i.e. the unholy desire by PSUs to perpetuate a culture of inefficiency and not let the more efficient private sector enter the picture. This culture, typified in HAL, is so deeply ingrained that an evolutionary change is impossible to imagine; only a radical transmutation will probably make our aerospace industrial complex productive.

The aspiration for India to be an aerospace power is commensurate with the fact that it is the fourth largest Air Force in the world and aiming to become the third largest commercial market globally in the next decade. However, we remain quite distant from becoming a global aerospace power. Indeed, no official iteration has aimed at 100 per cent indigenous self-sufficiency, the highest figure ever mentioned being 70 per cent. One of the valiant objectives of ‘Make In India’ was to increase indigenous manufacturing share of the GDP from 16 per cent to 25 per cent by 2022, and the other, to create a hundred million jobs by that year. The progress in both these directions has been depressing. Indeed, the non-creation of a substantial number of new jobs has been talked about in the media frequently while ‘Make In India’s’ incremental contribution to GDP has been unremarkable.

A lot of hype was created during DefExpo 2018 regarding the bold intention of turning India into a manufacturing hub for military equipment and goods. The objective of achieving a turnover of Rs 1,70,000 crore and export of Rs 35,000 crore in defence goods and services by 2025, was flaunted liberally. This projection is also lodged in the Defence Procurement Policy 2018 (DPP 2018) released as a draft just short of the event. However, a policy is not a plan; some strategic planning, possibly driven by the PMO so as to preclude inter-Ministerial shenanigans, is the need of the hour. In the interim, the Indian aerospace industry trundles along waiting for ‘Make In India’ to be transformed from a slogan to a defined strategy.