During the sordid saga of the medium multi-role aircraft that is still ambling towards its epilogue, avid watchers of the Indian aviation industry have been bemused witnesses to Dassault’s overtures to Reliance in preference to the Hindustan Aeronautics Limited (HAL) as a partner for the manufacture of the Rafale in India. Indeed, had Rafale had its way and had HAL’s bureaucratic hold in the public sector domain been less vigorous, the Rafale deal may well have seen Reliance leaping on to the centre stage of Indian aerospace manufacturing industry. Alas, that opportunity knocked fleetingly on India’s doors and passed into eternity.

One must concede that Reliance does not currently have the infrastructure in place to take on a task as gigantic and complex as producing components and assemblies and setting up a production line for a technologically advanced aircraft like the Rafale. However, its application to that onerous task would have been characterised by internal efficiencies alien to the public sector in India, especially those undertakings that are currently entrusted with the task of producing a worthwhile aircraft. Thus, we have the fourth largest air force in the world and in the civil aviation regime, are poised to be third largest in the next decade, but produce no significant aircraft designed indigenously. Prime Minister Narendra Modi’s ‘Make in India’ slogan, to the accompaniment of some supporting activities on the ground, holds promise of changing this status, but only if the Prime Minister’s blues can temper the vivid red hue of our processes and practices.

Defence Aerospace

There is a definite thrust by Prime Minister Modi towards increasing domestic production of military equipment, including fixedand rotary-wing aircraft and unmanned aerial vehicles (UAVs) for all three services. However, it will take several years of earnest and honest effort to undo the chronic malaise that appears to have set in as far as our public sector productivity is concerned in the area of aerospace. After nearly seven decades of independent existence as a nation, we are nowhere close to producing a frontline combat aircraft acceptable to the Indian Air Force (IAF) or the Indian Navy. The Tejas is not a leading edge aircraft and, despite the hype by HAL and the Ministry of Defence (MoD), is a far cry from being an answer to the IAF’s plaintive pleas for aircraft capable enough and in adequate numbers to cater for a very real possibility of a two-front war in the air and on the ground. More than three decades of R&D have still not yielded results commensurate with the investment sunk into the project in real terms. As on November 27, 2015, the IAF’s list of outstanding maintenance issues with Tejas stood at 43 (down from a much longer original list). However, the IAF, constrained to procure combat aircraft in large numbers to recompense the dwindling strength of frontline squadrons, has had to enhance the order for Tejas aircraft to 108 and HAL is gearing up to meet that requirement. Capacity augmentation plans including the setting up of a second production line, are likely to crystallise by soon and are expected to be funded only to an extent of 50 per cent by HAL, the rest being shared by the IAF and the Indian Navy. The MoD is considering two different products, one being a single engine, lighter version and the other a medium category, twin-engine fighter with enhanced firepower. There is a space there for ‘Make in India’ to flex its muscles as these two production lines are envisaged under strategic partnership or through government-to-government dialogue. A number of global aerospace majors are likely to be invited to participate in this ambitious programme which will essentially bear a ‘Make in India’ stamp. Reportedly, the Tejas will compete with other aircraft including Pakistan’s JF-17, a product of Chinese collaboration which figures in Sri Lanka’s procurement plans.

The Dhruv helicopter programme has had marginally better record than the Tejas; but has had several setbacks by way of accidents that blot its record. As far as a transport aircraft is concerned, we have not progressed much beyond licensed production stage. In December, HAL publicly displayed one turbofan engine (HTFE 25) and one turboshaft engine (HTSE 1200); but their actual industrial use is unclear as yet.

In contrast, China has shown considerable initiative in its ‘beg, borrow or steal’ approach to designing and producing new aircraft. While we have had a matching experience with flying foreign aircraft, our technology absorption (partly a euphemism for reverse engineering) has been abysmal. A sad comment on this shortcoming is that, when the IAF projected a requirement of additional 42 Sukhoi Su-30MKIs in 2012, the unit cost of production by HAL was estimated at Rs. 60-70 crore more than the price negotiated with Russia. Hopefully, the ‘Make in India’ mood will bring about a change in our approach to technology absorption and development of indigenous designs matching those that we have been operating for a long time now.

IT REMAINS TO BE SEEN WHETHER PRIME MINISTER MODI’S MAKE IN INDIA CAMPAIGN WILL BE ABLE TO PROVIDE A LEVEL PLAYING FIELD

The private sector, beneficiary only to stunted government patronage in the defence sector, has proved itself worthy of much better treatment by producing significant results. Dynamatic-Oldland Aerospace, India, produces the wing and rear fuselage of Lakshya, India’s pilotless target aircraft, the ailerons and wing flaps for the intermediate jet trainer HJT-36 and major airframe structures for the Sukhoi Su-30MKI besides working closely with Airbus Defence & Space and Spirit AeroSystems to assemble flap track beams for the Airbus single aisle A320 family of Aircraft on a ‘Single Source’ basis. The manufacture of a functional aerostructure of a major commercial jet by a private sector company is laudable and demonstrates the potential for ‘Make in India’, given the right conditions and the right environment.

Tata Advanced Systems Limited (TASL) has a contract with Boeing to manufacture aero-structures (components of an airframe including fuselage, wings and flight surfaces) for Boeing’s CH-47 Chinook and AH-64 Apache helicopters and has recently entered into an aerospace and defence manufacturing pact for co-production of aerostructures and collaboration on developing integrated systems, including UAVs. The two companies intend to form a joint venture to access markets jointly for the products and platforms to be developed together.

Reliance Defence has recently secured 12 in-principle industrial licence approvals from the Department of Industrial Policy and Promotion (DIPP) for manufacturing aircraft, helicopters, UAVs, all-terrain combat vehicles (ATCVs), night-vision devices, sensors, navigation and surveillance equipment, propulsion systems and simulators. The portents are visible for private invasion of HAL’s self-perpetuating dominance over the defence aerospace arena through the ‘Make in India’ campaign. It remains to be seen whether Prime Minister Modi’s ‘Make in India’ campaign will be able to provide a level playing field or whether the bureaucracy in control of HAL and other PSUs will have the last laugh.

Civil Aviation Industry

As in the case of defence aerospace, in the civil domain also, private participation has suffered while public sector was encouraged and sustained without it producing results commensurate with the investment and infrastructure developed. We have not been able to produce a single aircraft for commercial purposes while our neighbour China has three large aircraft on its sale list, the last one the C-919 being a narrow body 168-seat airliner that appears set to challenge the Airbus A320 and the Boeing 737. Perhaps the time has come to encourage private entities to introduce efficient productivity into civil aviation industry through ‘Make in India’.

ONE CAN ONLY HOPE THAT PRIME MINISTER MODI’S VISION IS MATCHED BY CHANGES IN THE WAY PRIVATE PARTICIPATION IS NURTURED THROUGH REFORM IN THE OPERATING ENVIRONMENT

Mahindra Aerospace has been in the utility aircraft and aerostructure manufacturing business and has its utility aircraft business based in Australia. It currently produces the Airvan 8 capable of carrying seven passengers and is developing a 10-seat turboprop, the Airvan 10. In June 2015, the company was awarded a large aero-components production contract by Germany-based Airbus Group company, Premium Aerotec. The multi-year contract envisages the manufacture and supply by Mahindra of a variety of metallic components that will be fitted into several Airbus aircraft programmes as part of assemblies produced by Premium Aerotec. Airbus Group has aerospace supplier partnerships with Indian entities and expects to increase its presence in India in the coming years, hopefully contributing to the furtherance of ‘Make in India’.

The India joint venture established between TASL and Sikorsky Aircraft Corporation (recently acquired by Lockheed Martin) has been producing S-92 helicopter cabin in India since 2012 and the project has been 100 per cent indigenous since 2013. The India operation assembles cabins and also produces all parts needed for the assembly, before shipping the cabins to the US for aircraft completion and customer delivery. The S-92 helicopter cabin and more than 5,000 associated precision components are made at Hyderabad through a strategic collaboration between Sikorsky and TASL.

Bharat Forge Limited has also entered the aerospace sector by signing four contracts. It has also entered into an agreement with Rolls-Royce to supply critical and high integrity forged and machined components for a range of aero-engines including Rolls-Royce’s flagship Trent engine.

Concluding Remarks

The foregoing is not a comprehensive repertoire on aviation industry’s engagement by ‘Make in India’ and there are many more entities that can be added to those mentioned above. What is evident is that ‘Make in India’ can be consummated with ease to the extent foreseen by Prime Minister Modi’s vision and beyond.

There is a definite shift in thinking emanating from Prime Minister Modi’s ‘Make in India’ initiative but the bureaucracy seems obdurate about adhering to its lumbersome way of working. The new Defence Procurement Procedure (DPP) which was to provide a road map for the ‘Make in India’ programme for defence acquisitions has not been promulgated as was scheduled for December 15, 2015. The new document is expected to be a significant improvement over the 2013 version currently in use and is likely to incorporate suggestions by the Dhirendra Singh Committee for better facilitation of ‘Make in India’ in defence. Going beyond indigenous production, the new procedure is expected to redefine blacklisting of firms, role of agents/middlemen in defence procurements, integrity pact, offsets besides other crucial parameters governing defence acquisitions. Hopefully, the new DPP will bring about an alacrity in the way defence production approaches ‘Make in India’.

There is also an increasing push to bring micro, small and medium enterprises (MSMEs) to the fore as far as ‘Make in India’ is concerned. The National Small Industries Corporation (NSIC) organised an MSME Defexpo 2015 in Bengaluru to bring around 200 MSMEs together with global giants including Boeing, Airbus and Honeywell. The purpose of the event was to further the ‘Make in India’ push for indigenisation by bringing in private participation from the MSME sector to augment the contribution of the big companies discussed above.

It is too early to say to what extent the Indian aviation industry will be affected by ‘Make in India’ as a lot would depend on how much easier it will be to conduct business in India in the coming years. It is not technological capability or potential that are the limiting factors; but the environment in which manufacturers operate. One can only hope that Prime Minister Modi’s vision is matched by changes in the way private participation is nurtured through reform in the operating environment.