Need to Achieve the Status of OEM

The deal with Airbus for 56 C295 aircraft will certainly provide an opportunity for the Indian private sector to enter the technologically intensive and highly competitive aviation industry

Issue: 10-2021By Air Marshal B.K. Pandey (Retd)Photo(s): By Airbus

On September 8, 2021, the Cabinet Committee on Security had cleared the proposal for the procurement of 56, twin-turboprop, C295 medium weight, multi-role, tactical, all-weather military transport aircraft for the Indian Air Force (IAF) from Airbus Defence and Space. Subsequently, the contract with the European aerospace and defence major Airbus for 56 C295 aircraft valued at 21,000 crore, was signed on September 24, 2021. This fleet of 56 C295 aircraft will be inducted into the IAF to replace the ageing fleet of HS-748 Avro that has been in service with the IAF since the early 1960s. As the fleet of HS-748 Avro has served in the IAF for over six decades, it has been overdue for retirement from service. Of British origin, the HS-748 Avro was produced under licence by the Indian aerospace major Hindustan Aeronautics Limited (HAL) at their facility in Kanpur. As the HS-748 Avro does not have a rear ramp door but only a side door, it can only carry passengers and small size cargo. The C295 on the other hand, has a rear ramp door that provides tail loading facility and renders it capable of airlifting cargo of larger size and can also paradrop troops as well as heavy cargo. Compared with the HS-748 Avro, the C295 has a better design and is far more capable to undertake military tasks.

As the HS-748 Avro fleet had already reached the end of its total technical life, the IAF had been waiting for the finalisation of the deal for 56 C295 for over six years. Now that the contract has finally been concluded with the original equipment manufacturer (OEM), under this deal, the first 16 aircraft will be delivered by them in “fly away” condition from its own final assembly line in Spain and the remaining 40 aircraft will be manufactured under licence in India by the Tata Advanced Systems Ltd (TASL) in partnership with Airbus, over a period of ten years. The responsibilities of the OEM will include undertaking structural assembly, systems integration and testing, final aircraft assembly as well as management of the indigenous supply chain. All the 56 C295 aircraft that the IAF will receive will be equipped with indigenous electronic warfare suites. This will be the first such venture that will boost the participation by the private sector in the Indian civil aviation industry.

Apart from the requirement of this platform for the IAF, the Indian Border Security Force (BSF) is also looking at the possibility of induction of four of this aircraft that will enhance the projected number of C295 aircraft to 60. With high wing, rear ramp door that provides tail loading facility, a maximum payload capacity of nine tonnes and powered by two turboprop engines, the C295 is quite similar to the An-32 that was inducted into the IAF over three and a half decades ago. Given the similarity between the two platforms, the C295 could well be a suitable replacement for the fleet of over 100 An-32 that were inducted beginning in the mid 1980s and currently continue to be in service. However, having served for more than three and a half decades in the IAF, the fleet of An-32 aircraft would be due for phasing out in not too distant a future. This undoubtedly enhance the potential of the market for the C295 which will be a welcome development for the Tata Group as also for the OEM Airbus. The Tata Group is also looking at the possibility of a substantial market in the Indian civil aviation industry that could find the C295 as a good platform to enhance regional connectivity among the smaller towns and cities in the country’s Northern Himalayan region that are not accessible to larger civil airliners. Airbus is looking at capturing a sizeable share of the Indian civil aviation market especially as the C295 is already operational in the civil aviation segment in as many as 19 countries across the globe.

There is no doubt that the procurement of the 56 Airbus C295 by the IAF will for the first time, provide an opportunity for an aerospace firm in the private sector in India under a transfer of technology arrangement from a foreign aerospace company to produce a military aircraft. So far this privilege was reserved for the defence public sector enterprise HAL that had a virtual monopoly in the field of license production of military aircraft, both fixed and rotary wing. This deal will certainly provide an opportunity for the Indian private sector to enter the technologically intensive and highly competitive aviation industry, thereby giving a boost to the aerospace ecosystem in India. It will also be of immense benefit for the MSMEs located across the country who will have the opportunity to manufacture components for the aircraft.

However, aspirations of the nation to join the ranks of the leading global aerospace and defence majors of the world will only be fulfilled if the Indian aerospace and defence industry can break away from the domain of licensed production and move forward to achieve the status of Original Equipment Manufacturer.