g DEFBIZ
‘MADE IN INDIA’
AERO ENGINES POSSIBLE DIPLOMACY
India must move ruthlessly to prevent foreign manufacturers from dumping yesterday’s technology, writes SAURAV JHA
A
Nothing should, however, stop heightened domestic research and development (R&D) in propulsion technology as that is the best guarantee to hold foreign companies to their promises as it were. According to estimates, India’s aeroengine market alone (summing over various acquisition and upgrade programmes) will amount to $10-15 bn (Approx. `55,000 to 70,000 crore) for the next ten years. Since a lot of this will be met via imports, a very large offset opportunity exists for India’s emerging aerospace industry in this domain. These opportunities span the entire spectrum from supplying engine components to providing Maintenance Repair and Overhaul (MRO) services. In fact, MRO-related expenses can often exceed the initial procurement cost of an engine. Main-
tenance which includes dismantling, inspecting, assembling and testing aircraft engines is, however, the single largest MRO segment. Engine Maintenance constitutes 35 per cent of the overall cost of maintaining an aircraft. More than twothirds of engine maintenance is taken up by the cost of materials, with labour accounting for another 22 per cent. India’s MRO segment is expected to grow to $2.6 bn (Approx. `14,000 crore) by 2020. Now, aero engine components that are likely to be sourced domestically include casings, blisks, shafts, housings, stators, pump housing bushing, sleeves and sub-assays. This would mean that there will be ample business for existing Tier-2 and Tier-3 players. The Tier-3 segment, in particular (theoretically any company which has some casting and forging capability and can build fasteners, bearings, wiring
HEMANT RAWAT
s India and China build their respective aerospace industries, the one glaring gap remains their inability to mass-produce wholly indigenous modern aircraft engines. It is that one major area where both countries remain dependent on foreign support to varying degrees. In the next few years, India, however, has the potential to create a major domestic industrial and technological base in the arena of aero-propulsion by leveraging its diverse military aviation purchases. Clever use of the offsets that will mandatorily follow with most imports will not only allow the domestic aerospace industry to integrate itself with global supply chains but should also facilitate the timely transfer of technology in critical areas. The Ministry of Defence (MoD) must act ruthlessly in this context by not allowing foreign majors to offload yesterday’s technology.
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April 2013