Global aerospace firms use tie-ups to tap India market

India plans to spend $100 billion to buy fighter planes, helicopters and ships

Joseph Weiss, president of Israel Aerospace Industries Ltd (IAI), is bullish on India. His company is developing the medium-range surface-to-air missile (MR-SAM) with the Defence Research and Development Organisation (DRDO) and it has been expanding business.

At AeroIndia 2017 here, he signed a term sheet for a joint venture with Kalyani Strategic Systems, part of the Pune-based auto component maker Kalyani Group that is building a strong defence business. “We will transfer technology to build these products for India,” said Weiss, who has similar ventures with Tata Advanced Material and Bengaluru-based Alpha Design. On Wednesday, Weiss also signed a contract with Dynamatics Technologies to build mini unmanned aerial vehicles (UAVs) for the armed forces.

Baba Kalyani, chairman of Kalyani, said collaborating with global partners would help India firms get access to critical technology and help build systems and products for the armed forces. Early this week, Larsen & Toubro (L&T) and European missile specialist MBDA set up a joint venture to develop and supply missiles and missile systems for the local market.

At a seminar here on opportunities to integrate India into the global supply chain, George Standridge, vice-president (strategy and business development), Lockheed Martin Aeronautics, said, “India is an important partner for the US industry.” 

“The US and Indian defence industries are poised to work collaboratively, to position India as a major defence partner of the United States,” Tom Bell, senior vice-president, Boeing Defense, said. In other deals, Airbus on Wednesday signed a memorandum of understanding for establishing a Centre of Excellence for aerospace skill development in Hyderabad, together with the government of Telangana, National Skill Development Corporation India and AEROCAMPUS France. The Centre, which will come up at the Begumpet Airport, will train candidates on aircraft manufacturing, logistics, maintenance, repair and overhaul, ground handling and special aviation processes. Defence and security company Saab has offered a fighter sensor package for the homegrown Tejas LCA Mk1A fighter aircraft. The package consists of a state-of-the-art Saab Airborne Electronically Scanned Array fighter radar closely integrated with a compact electronic warfare suite using Gallium Nitride based AESA technology, the company said.  

Hindustan Aeronautics said its overall investment over the next five to six years is expected to be about Rs 17,500 crore, and it may go for loans from banks soon to fund its projects.

Such deals would help the military get access to critical defence products at reasonable costs and with committed timelines. Defence Minister Manohar Parrikar has mandated that global firms should transfer critical technology that India lacks if they wanted to access the Indian market. He said partnerships with Indian companies would help local firms gain critical knowledge in building complex defence systems and equipment.

The government plans to spend $100 billion to buy fighter planes, helicopters and ships and is looking at nearly half of these being sourced from the local market.   India’s offset policy mandates global companies source 30 per cent of the value of the military items sold over Rs 300 crore from local companies.  The biggest of the deals has been Reliance Defence’s venture with French aircraft maker Rafale for Rs 25,000-crore offsets to be sourced for the 36 Rafale jets’ order.  Meanwhile, DRDO said the extended range version of the Brahmos missile of 450 km is likely to be tested on March 10.

With inputs from PTI