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Boeing, AIESL to set up MRO of critical equipment on key Boeing defence platforms in India

In the presence of officials from the Indian Navy, AIESL and other key supplier partners, the collaboration between Boeing and AIESL was announced at a Aatmanirbhar in Defence conference.

This venture has been announced under the US based Boeing India Repair Development and Sustainment. initiative.

Critical equipment including the P-8I operated by the Indian Navy and the 777 VIP aircraft operated by the Indian Air Force, are among the key platforms of Boeing which can now be maintained, repaired and overhauled in India. On Tuesday, Boeing announced its plans to collaborate with AI Engineering Services Ltd. (AIESL) which is a Directorate General of Civil Aviation (DGCA) approved MRO, for the setting up of Maintenance, Repair and Overhaul (MRO) of critical equipment on key Boeing defence platforms in India.

This venture has been announced under the US based Boeing India Repair Development and Sustainment (BIRDS) initiative. Under this initiative the plan is to make India the regional MRO hub for providing the MRO facilities to the different Boeing platforms being used in India as well as exploring collaboration in repair and overhaul of commercial common 737NG equipment which is fitted on the P-8I fleet as well as the landing gear.

In the presence of officials from the Indian Navy, AIESL and other key supplier partners, the collaboration between Boeing and AIESL was announced at a Aatmanirbhar in Defence conference.

More about the MRO

This will help in faster turnaround, exceptional and operational capability and mission readiness for the Indian armed forces. This is also in keeping with Indian government’s Aatmanirbhar Bharat vision of making the country a regional MRO hub, top Boeing official has said while announcing the collaboration.

Expressing its commitment to provide critical support to Indian Armed Forces, under BIRDS hub initiative, Sharad Agrawal, CEO, AI Engineering Services Ltd., said, “Such collaborations would drive forward our vision for strengthening MRO capabilities in India, for India.”

This MRO will help to provide an in-country and alliance of suppliers which will be led by Boeing in India and create a competitive MRO ecosystem for repair, maintenance, skilling, engineering, and sustainment services of defence and commercial aircraft.

And, according to an official statement issued at the end of the announcement, the hub has been growing capabilities in India in the areas of heavy maintenance, component repairs, skilling and training of MRO maintainers.

As has been reported earlier, the important aspect of BIRDS is the training programmes which help in increasing skilled manpower. This is done by developing sub-tier suppliers and medium, small and micro enterprises (MSMEs) in an effort to build high quality MRO capabilities in the country.

Boeing President & CEO visits India

To explore deeper participation in India’s efforts in self-reliance and Make in India, especially in the defence sector, last week, Boeing President and CEO Dave Calhoun was in India and had called on Prime Minister Narendra Modi.

According to reports, Boeing top officials accompanied by Sir Michael Arthur, President Boeing International, and its India head Salil Gupte had met with other top officials.

The agenda was far more serious than the scaling up the MRO facilities of various Boeing platforms, the leasing of aircraft, the six P-8i aircraft which have been put in cold storage and the 114 aircraft competition for Indian Air Force (IAF).

Reports in the public domain indicate that the Boeing CEO was here because of the show cause notice received from the Ministry of Defence against the company’s failure to implement the offset deal as per the contract of a prior deal.  The offset agreement states that 30 percent of the value of the order given to the US aerospace giant has to be put back in India in various sectors that have been identified under the Defence Procurement Procedure, Ministry of Defence.

What was Boeing expected to put back?

Under the P-8I offset obligation (India has received 12 of these aircraft and the plan to get additional six has temporarily been put on hold by the Ministry of Defence). And based on the information available in the public domain as per offset requirements of the government, around USD 730 million had to be put back – direct or indirect.

Background

In 2019, on September 23, the Comptroller and Auditor General (CAG) had tabled a report in Parliament in which it had noted that vendors made offset commitments to get contracts “but later they were not they are not earnest about fulfilling these commitments and raised new issues which delayed offset implementation.”

The CAG report listed cases of 36 Rafale fighter aircraft from France’s Dassault Aviation, a contract with US giant Boeing to buy 10 military transport C-17 III aircraft and 80 helicopters from Russian Rosoboronexport (ROE).

What are Offsets?

They are benefits that a buyer gets from a seller. It is technology/capability Indian industry is supposed to get from a foreign vendor who is selling equipment to India.

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