Karnataka set to push aerospace parks

The Confederation of Indian Industry (CII) has mooted the setting up of a core group to go into the various aspects of developing the state as an aerospace hub. The objective is to coalesce three aerospace parks; the one in Belgaum set up by the Bangalore-based QuEST Global, an aerospace park that the government intends to develop near the Bengaluru International Airport at Devanahalli, and a park that the Bengaluru International Airport Ltd is said to be promoting on its own.

The industry bodies are bent on ensuring that it will be able to attract some interest from companies in the aerospace park being promoted by the state. “We are trying to go all out to make aerospace a thrust industry in Karnataka. How to go about it is the question,” said Aroon Raman, vice chairman, CII. The automobile industry is said to have faced the same issues 10-15 years ago that the aerospace industry is facing today.

At the central level, statutory problems and the limit of 26 per cent FDI in offsets is a barrier to investments. At the local level, value-added tax, rationalisation of taxes to favour the sector, provision of quality power and land are said to be the chief issues that are the need of the hour though. The infrastructure issues too have been posing a hurdle to developing the sector in the state. There is enough manpower to leverage on, said Raman, adding, “Ecosystem is already there in the space. Even if we are late, there is ample time to catch up with other states that may have stolen a march over Karnataka. We can develop an aero-component sector.”

“The aerospace park SEZs will be eligible for benefits and tax sops applicable to such export zones,” Karnataka industry principal secretary V P Baligar said at the session, organised by the Karnataka chapter of the Confederation of Indian Industry.

The rapid growth of aviation sector in the country has thrown up opportunities for the local industry, and the government policies may not exactly help the local industry gain much. The Indian offset partners that carry out projects as part of the defence offset commitment, cannot have civilian offset partnerships. “Why not allow firms to be flexible enough to have both, or allow a certain proportion of civilian offset business,” said a senior official from a company in the aerospace sector. The basic argument is that defence offsets are very often a one-time affair, happening once in 10-15 years. After the initial phase, it tapers off rapidly.