Indian Defence Review

Importance of R&D

The efficiency of airliners and the effectiveness of military aircraft are largely dependent on the quality of aero engines, aero structures, avionics and software used to build the aircraft. The technology for manufacturing these components is never easily shared. Take the case of aero structures. Companies such as Boeing continue to rely on aero structures manufactured either in-house or within the US. The company’s tie-ups abroad, including India (see below) are exclusively to gain market access. The company would not allow any dependency to creep in.

It is important to understand that aircraft component technology is intricately coupled with the existing industrial base, something that is not amenable to easy transfer! The capabilities to develop aero engines, aero structures, avionics and software are acquired after sustained and heavy investments in R&D and infrastructure. The US, EU, France and Russia have the infrastructure, precision engineering skills and precision manufacturing capabilities to make civil airliners and military aircraft. The western nations often co-develop these components, without sharing critical technologies.

Indian Aviation Industry

India is the fastest growing civil aviation market in the world, as per the International Air Transport Association (IATA). In July 2015, India’s domestic air passenger demand grew by 28.1 per cent as compared to the previous year. This growth was three times as compared to China’s (10.9 per cent) growth and five times as compared to United States’ (5.9 per cent) growth during the same period.

In terms of civil aviation market size, India is the ninth largest, worth around $16 billion. The country has ten airlines, including three international carriers. The total number of civil aircraft is around 1,216, and civil helicopters, 280. In terms of manufacturing, India’s civil aviation industry was practically non-existent till a few years back. Since 2009, at least three private sector companies TAS, Reliance Defence, Bharat Forge and Mahindra have forayed into the civil aircraft production market segment. State-owned HAL has even launched a programme to develop and manufacture a regional airliner in collaboration with a foreign vendor.

Tata Advanced Systems Limited (TASL)

In June 2009, TASL and Sikorsky set up a JV in Hyderabad for manufacturing S-92 helicopter cabins. In 2010, TASL and Lockheed Martin established a JV in Hyderabad – Tata Lockheed Martin Aerostructures Limited (TLMAL) – to manufacture C-130J aero structures in India. In July 2014, TASL tied up with RUAG to set up a manufacturing unit in Hyderabad to make fuselages and wings for the new Dornier 228 aircraft. In September 2015, TASL and Boeing set up a JV in Hyderabad to manufacture Boeing AH-64 Apache helicopter fuselages and other aero structures. The facility, which is expected to be operational in 2017, will eventually be the sole producer of AH-64 fuselages globally and will also pursue opportunities to provide systems integration and other aerospace services. TASL and Russia’s Sukhoi are in negotiations for local manufacture in India of key Sukhoi Superjet 100 aero structures. Russia is hoping to sell 50 SSJ100 in India in the next three to five years. In July 2016 TASL and Bell Helicopter joined forces to develop both commercial and government (including military) rotary wing markets in India in the Light Utility and Reconnaissance segments. The TASL Bell JV will compete for the Naval Utility Helicopter (NUH) order.

Reliance Defence

In May 2016, Reliance Defence and Ukraine’s Antonov announced a partnership for production of dual version transport aircraft for military, paramilitary and commercial use in India. The market size is assessed at `35,000 crore in 15 years.

Bharat Forge

In May 2016, Bharat Forge and Rolls-Royce announced an agreement for supply of aero engine components. The agreement envisages supply of critical and high integrity forged and machined components for a range of aero engines including the flagship Trent Engine. Also, Bharat Forge is understood to be in talks with Safran (Turbomeca) to part-build the Kamov-226T’s engines in India. The helicopter is powered by two Turbomeca Arrius 2G1 engines.

Mahindra Defence

In July 2015, Europe’s Airbus Group and Mahindra Group struck a preliminary deal to build helicopters jointly for the country’s armed forces.

HAL: DO-228 Light Transport Aircraft

HAL signed an agreement to license-manufacture the DO-228 Light Transport Aircraft at HAL, Kanpur in 1983. Production of the aircraft started in 1984 and HAL Kanpur has since delivered 124 aircraft to customers including Vayudoot, the Indian Air Force, the Indian Coast Guard, the National Airports Authority, UB and the Indian Navy. Two aircraft configured for maritime surveillance have been exported to Mauritius and one has been supplied to the government of Seychelles.

HAL Regional Transport Aircraft

HAL proposes to manufacture a 50-80 seater regional aircraft in India in partnership with an overseas OEM with global presence. The aircraft would have commercial and military variants. Maximum all up weight shall be between 20,000 to 50,000 kg. The commercial variant of the aircraft would be able to seat 50-80 passengers with luggage, cabin crew and attendants. HAL is seeking partnership with the OEM of a proven in service state-of-the-art aircraft which can enter into service quickly with least investment and operating cost of aircraft. The prospective business partner would be required to provide the know-how to jointly manufacture, test and supply the aircraft to domestic and international customers.

The Journey So Far and Looking Ahead

Soon after independence, India attempted to create a defence aerospace industry through investments in public sector companies and organisations such as HAL and DRDO. After making some headway (HJT-16 Kiran Jet Trainer and Marut HF-24 fighter), HAL and DRDO efforts faltered. As a result of slow economic growth, bureaucratic disdain for the private sector and the relative isolation of India’s socialist economy, the nation’s industrial base fell behind global standards to an extent where it was not possible for HAL and DRDO to develop aircraft and aero engines that matched the performance of those developed in the West. HAL attempted to stay relevant as an airframe and aero engine manufacturer through license production of civil (Avro 748, Dornier Do-228) and military (MiG-21, Jaguar, Su-30MKI) aircraft. In the absence of heavy investments in R&D, world class industrial base and supply chain ecosystem, HAL’s attempts proved futile.

With the opening of the economy in the early 1990s, followed by opening of defence production to the private sector, focused efforts by organisations such as the Aeronautical Development Agency (ADA) and introduction of a Defence Procurement Policy (DPP) mandating offset investments or ‘Make-in-India’ there are now clear signs of revival in aerospace manufacturing. Economic revival has spurred a boom in civil aviation increasing market size to an extent where potential aircraft component manufacturers in India are starting to salivate. Private sector organisations such as TASL have already seized the opportunities resulting from offset investments. ADA, GTRE and HAL have revived India’s aircraft and engine design capabilities to some extent. The ADA has also done pioneering work in aviation related software, developing flight controls laws to make fly-by-wire possible. An ecosystem of suppliers to support emerging players such as HAL, TASL, and Reliance Defence is beginning to emerge.

The outlook is positive, but progressing from aero structure and aero engine production to aircraft production has challenges. Japanese aerospace companies have been manufacturing a wide range of important civil, military and corporate aerospace products for decades. Their components are used on Boeing and Airbus airliners, as well as the engines that power them. However, Japan has struggled to develop its own commercial jets, possibly because Japan lacks a big enough domestic market. It’s only now that Mitsubishi is developing a regional airliner powered by P&W PW1000G family GTF engine.

Conclusion

India has never attempted to formulate a national vision for aerospace. Now is perhaps the time to do so. Propulsion, materials and avionics technologies are closely guarded secrets. The government needs to put in place a policy framework that seriously encourages public and private sector to step up R&D in these domains so that the country can break out of the import spiral. The policy framework should simultaneously incentivise the use of domestically produced aircraft and components.

During the Cold War, the Soviet Union remained a world leader in aerospace despite lagging behind the West in electronics and materials by nearly a decade. Its aero engines were less fuel efficient, its avionics bulkier and its aero structures heavier, but they made do with what it had. It chose to be a player, knowing perfectly well it couldn’t be the number one. Following Western sanctions imposed in 2014, Russia is reverting to the Soviet era policy of relying on its domestic industry. Through determined effort, Russia has narrowed the technology gap and is now developing airliners (SSJ-100 Regional airliner, MS-21 narrow body short to medium haul airliner) and high bypass turbofans (PD-14 family) that nearly match the operating efficiency of Airbus and Boeing airliners and P&W and GE high bypass turbofans.

China is striving to acquire full scope aircraft manufacturing capabilities. It has made impressive stride in aero structures, avionics and software; but remains largely dependent on Russian help in aero engines. China is now on a similar trajectory as Russia. It is developing airliners (ARJ21 Regional Airliner, C919 Narrow body short to medium airliner) as well as high-bypass turbofans (CJ-1000A). China’s airliners would initially be powered by western engines, but later the country hopes to fit domestically developed replacements. Brazil also needs mention in this context. A developing country, Brazil exports regional jetliners around the world, including to India. The country has also done well in defence aerospace. It is now set to locally manufacture the Saab Gripen NG.

The state of the Indian civil aviation industry does not reflect the potential of the nation. We need to leverage the growth in civil aviation market as well as defence aerospace to stimulate a capability growth in aero structures, aero engines and avionics industrial base. Such capability growth would positively impact defence aerospace and truly make India a global power.