Flight to India

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: We have all seen Tata Group chairman Ratan Tata’s sortie on board the US fighter aircraft F-16 by now. But global aviation majors like Lockheed Martin, Boeing, Thales, Pratt & Whitney, Bombardier, Rolls Royce top-honchos’ flight to India went relatively unnoticed.

Indian aerospace and IT majors saw a flurry of activity as global majors scouted for outsourcing aerospace and defense products. Aviation analysts feel that engineering and design services being outsourced to India are emerging the main opportunities. These include control system design, embedded development, high level aeronautical system design, simulation, testing devices, cockpit equipment support software, air traffic management systems, and composite structuring.

Reaping the windfall is a wide gamut of homegrown aerospace and IT majors—Hindustan Aeronautics Ltd (HAL), Larsen and Toubro (L&T), TCS, Wipro, Infosys and HCL.

Indian advantage is obvious to those re-evaluating their engineering and business processes. A recent report by Research & Consultancy Outsourcing Services (RNCOS) predicts that the Indian aerospace technology outsourcing market, which is currently at $155 million, will reach $1 billion by 2009. And by 2020, India’s offshore engineering services market could go up $3 billion, according to Booz Allen Hamilton analysis.

Not surprising then that aerospace majors like Lockheed Martin, Boeing, Thales, Pratt & Whitney, Bombardier, Rolls Royce, among others, flocked here, hoping for a piece of the billions of dollars in defence contracts India plans to spend in modernising its armed forces.

Clearly, the buzz in defence sector revolves around the $10 billion contract for 126 fighter aircraft. On the civil aviation front too, the excitement is palpable as India’s aviation industry is likely to buy aircraft worth $75 billion during the next ten years during which the number of aircrafts would increase from the present level of 250 to 1,500 aircraft.

And to ensure that Indian companies gain from the opportunity, the government has made it mandatory for aircraft manufacturers to source 30% of the value of the aircraft from Indian vendors. “We don’t want to have a buyer-seller relationship. We will buy, but technology transfer must be there and we must be involved in designing, development and co-production,” says the defence minister AK Anthony.