Boeing is planning to outsource $1 billion worth of aerospace work to India. It signed a memorandum of understanding (MoU) with public sector Hindustan Aeronautics Ltd on Thursday that would involve the manufacture of critical components for military aircraft and helicopters by the Indian company.
Under the ten-year MoU, ?Both Boeing and HAL will explore business opportunities aimed at transferring work packages to India with an initial value of $10 million to $20 million annually, increasing in size and complexity as business opportunities develop,? Jim Albaugh, president & CEO of the company?s Integrated Defence Systems unit said in New Delhi on Thursday.
HAL had a turnover of $1.34 billion in 2005-06. Its turnover for 2007-08 is expected to reach $1.88 billion, a growth of 41%.
Albaugh said the MoU would be operational from today, ?without any strings?. Talking to a select group of mediapersons, he said an initial tranche of work worth $20 million was being transferred to HAL immediately. The company would soon send materials and personnel to set up an additional manufacturing facility.
HAL?s capabilities cover the manufacture of sub-systems for a wide range of Boeing products like the F/A-18 Super Hornet combat jet, the CH-47F heavy-lift Chinook helicopter and the P-8A multi-mission maritime aircraft.
Ashok K Baweja, chairman of HAL, said, ?HAL and Indian industry gain from this long-term business arrangement in terms of technology upgrades, while Boeing can look forward to a reliable source for its product requirements.? The MoU also includes sharing key Boeing business and manufacturing tools with HAL, he said.
As a sweetener, Boeing was seeking clearance from the Indian government to use part of the HAL deal amount as credit against future offsets on major contracts. The Seattle-based company is one of the six contenders for the purchase of 126 multi-role combat aircraft by Indian Air Force (IAF) and eight long-range maritime reconnaissance planes.