Look beyond offset policy, firms tell govt

Global manufacturers lay stress on R&D to develop aerospace manufacturing sector

The government should think beyond the offset policy to make the country a part of the global aviation manufacturing chain, said people heading Indian  operations of international aerospace manufacturing firms.

According to them, the government should think of synergising the civil and defence aviation sectors, focus on research and development, introduce a programme to improve capabilities and forge partnerships between private and public sector companies.

These views were shared at a discussion on aviation manufacturing at the ‘India Aviation 2016’ on Thursday.

Under the government’s current offset policy, foreign companies that bag major defence contracts have to spend at least 30 per cent of the contract value in India through local sourcing. Several aerospace companies have established joint ventures with Indian counterparts to make some parts used in the products that they are going to sell to the Indian defence forces.

“People often ask me: ‘What are you doing over the offsets?’ I say that’s a wrong problem to solve. We make sure our Indian partners are globally competitive in quality, delivery and cost, to be able to embed themselves in the global supply chains, the way we did in Japan and Korea,” said Pratyush Kumar, president, Boeing India.

Citing the first titanium forging done recently by Bharat Forge for the company, Kumar said Boeing intends to deepen the partnerships to take India to the level of Japan and Korea. “The government should take steps towards making the local aerospace industry globally competitive.”

Pratt and Whitney India Manager and Managing Director Palash Roy Choudhury said the R&D and technology development in aerospace has been happening only in the public sector and the government needs to take private sector players on board as they look to quickly commercialise the innovations.

To bring technology and more manufacturing into the aerospace sector, the government also has to raise the FDI limit beyond 50 per cent, said Roy Choudhury.

The inter-operability between Directorate General of Civil Aviation  and the regulators of various countries will also be required to make the quality

certifications universally acceptable with regard to local manufacturing, he said.

Textron India Private Limited Managing Director Inderjit Sial said the issue of raw materials has been a major challenge in India.

“It is not about the technology. Most of our new technologies are being developed in India,” he said.

Textron is planning to increase the production of BEL 407 helicopter cabins to 10 per month from four at present, but Sial said he was not certain when achieve this target would be achieved because of reasons like non-availability of quality raw materials like titanium and composites.

Rajesh Chaubey of Honeywell India said there were significant gaps in the Indian aerospace manufacturing and to overcome these issues, India should focus on developing strong design and development capabilities in the country.

“If you develop the design and development capabilities, it goes without saying that the products designed here would also be manufactured locally,” he said.

According to Ashish Saraf, vice-president, industry development and strategic partnerships, Airbus India, the country currently lacks engineering talent in core areas of manufacturing like thermodynamics and was available mostly in the support services.

This has to be changed by way of creating specialised institutes, he said. With aerospace being a capital intensive industry the creation of common facilities would help develop the necessary ecosystem to support the growth of industry and Airbus too is planning to participate in such endeavours, according to him.

He also suggested the government to create an aerospace fund to help start-ups to grow in this sector.