Business In The Air

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Photo: PIB
Photo: PIB

The 10th Aero India, the biggest aerospace and aviation event in the country, this week has sent a strong message to the aviation majors across the globe that India, while being one of the biggest buyers, will also become a manufacturing base.

Inaugurating the event, Prime Minister Narendra Modi sent a direct message: “Make in India”. “A country with a strong defense security can support its economic growth. In India, defense industry employs two-lakh people, with their output is Rs 43,400 crore. Eighty percent of our equipment is imported. Even a 20 percent cut in imports can create one lakh jobs,” he said.

The event, which is being held in Bengaluru till this Sunday, has participation from over a 100 countries, with US sending the biggest delegation with 64 members. The Modi government’s Westward look, especially towards America, has drawn active response from the US. The Russians who have been the mainstay of the Indian defence supplies in the last five decades, has a much smaller presence in both air displays and exhibition area.

The Defence Minister, Manohar Parrikar, echoed the prime minister’s opinion, saying that the country’s shopping list was still long but thrust would be given to those who are willing to “make in India” or transfer technology. While “Make in India” is not a new slogan as far as the Defense production is concerned as former defence minister AK Antony had in 2013 rolled out a Defense Production Policy (DPP) but the new government seems to be keen to stamp the Make in India seal on the same. “While I have not read the full DPP 2013, I believe there are many flaws in it, especially in the Offset clause. The new Make in India will include Micro, Small and Medium Enterprises and others. I have met CII and FICCI and will roll out a simpler policy,” he said.

However, the Defence minister kept the suspense on the 126 mmrca procurement alive. The Rafale, which was shortlisted by the Indian Air Force (IAF) to replace the aging Mig fleet, is yet to get a final nod from the government. “I have asked for a detailed report from CNC (Contract Negotiation Committee) on the issue and they are yet to submit, let them complete the process first,” he told Tehelka. While the word has been going round that the Rafale deal may fall through with change in government in Delhi, the minister was quick to assure that national security will not be compromised by any delay. “We are utilising aircraft better now and will manage with that, in addition the security scenario has become much better in the last few months.”

However, this raises a more pertinent question of whether India is looking Westwards totally, or a shift in defense policy is on the anvil. There are also doubts about defence readiness and how fast India can shift from an overly Russian equipment base. Some defence experts believe that the Rafale may pave the way for either the American F-16 or the F-18 Superhornet to make an entry to Indian skies.

The Americans, however, seem not too keen to commit on whether the improving diplomatic ties following the visit of President Barack Obama could make India change the decision to buy Rafale. US Ambassador Richard Verma refused to answer questions from Tehelka.

Corporate India, which has always been an equal partner in the “Make In India” campaigns, sees a major opportunity with the Indian defence sector opening up. Anil Ambani-led Reliance Defence Systems hopes to pump in major investments. Wg Cdr Rajiv Dhingra, managing director, Reliance Defence Systems, told Tehelka: “We are looking at playing a big role in the sector. The government is looking at supplying helicopters for defence and we are getting ready to make a bid for the same as defence manufacturing will be the next big sector.”

Earlier, speaking at the Make in India seminar, Ambani highlighted the challenges that the Indian private industry faces while dealing with the government. “The long shadow of the Three Cs—CBI, CVC and CAG—makes the Indian industry wary, especially with reference to the coal block allotment and defence purchases. We need to overcome these three Cs with two Cs: courage and commitment.”

While indigenisation may be the key word for the new government, but the Indian defence sector’s, especially Hindustan Aeronautics Limited’s (HAL), contribution to aviation cannot be missed. The hal-built Light Combat Aircraft, Tejas, its Advanced Light Helicopters, DHRUV, and the under development Light Combat Helicopter were the main attractions of the air displays for the over three-lakh visitors at Aero India.

hal, which is slated to be listed in the stock exchanges and get a Navaratna status, is excited by the business opportunities the Aero India provides. K Naresh Babu, managing director of hal, told Tehelka: “After we supplied helicopters to Ecuador, we had many queries, and we hope helicopters will become the thrust of our exports.”

The Aero India 2015 also had several visiting military and defence delegations. Commodore Ahmed Al Said Busih, who led the Omani team, told Tehelka: “While we are not immediately scouting for any Indian defence ware, we want to see the progress that is being made. It may be a while before we look at any such development.” There were delegations from Malaysia, Sri Lanka, Nepal and many African countries.

The last couple of years have seen Israelis playing a crucial role in the weaponry systems of Indian defence forces, especially missiles. The Israelis have made their intention clear as they expect India-Israel defence relationship to move closer. An Israeli high-profile delegation paid a visit to the show looking for avenues that some of the technology-transfer agreements can provide.

Seven of the 11 foreign military aircraft on display were American—two F-15C Eagles, two F-16C Fighting Falcons, one Boeing KC-135 tanker, one C-17 Globemaster III and a P-8A Poseidon maritime surveillance aircraft. The Indian Air Force flies the C-17, while the navy operates an Indian version of the P-8A, called the P-8I.

letters@tehelka.com

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