- India is well poised to emerge as a Global Economic and Technology Power. An important constituent of ‘power’ is a national industrial capability that can deliver high technology state of the art aircraft and systems to both military and civil customers.
- The G8 countries all have a solid aircraft manufacturing base to cater for both military and civil applications except India. In the BRICS group, India is the only country that has not yet fielded an operational commercial aircraft or helicopter or a large UAV, yet. In the IBSA grouping India draws a blank in civil aircraft manufacturing.
- The global aerospace industry is now being challenged by increasing competition and cost pressures as well as rising energy costs, high raw material prices and a weak US Dollar. Globally, consolidation of the industry is being witnessed with Airbus and Bombardier joining hands to offer the 200 series single aisle aircraft whilst the Boeing-Embraer deal has fallen through. To combat these challenges, airframe manufacturers, aerospace OEMs and Tier 1 suppliers are leveraging the advantages arising from the globalization of the aerospace supply chain. They are adapting to these challenges by outsourcing more and more elements of technology, design and component/sub-assembly manufacture. It is in this space that emerging economies, particularly India, can find opportunity to build their aero space business largely driven by exports to OEMs. Some OEMs are also establishing Final Assembly and Check Out facilities for a variety of aircraft in countries which offer competitive labour rates, low taxes and a skilled work force. India has been offered two clear proposals for locating fighter aircraft manufacturing in India as well as an earlier offer to build amphibious aircraft in India. Both thee projects are idling and should be revived.
- The global demand for commercial aircraft range from 12,000 – 15,000 aircraft over the period until 2030. Bombardier Commercial Aircraft forecasts 12,550 deliveries in the 60- to 150-seat segment over the 2017-2036 time frame. Boeing believes the market size to be about15,000 aircraft The total market is valued at US$820 billion with the small single-aisle segment responsible for around 70% of revenues.
- From a demand perspective India also cannot be found wanting. Military aviation is looking to induct at least 600-700 helicopters, 200-300 fighters, 75-90 transport and surveillance aircraft and more than a 100 High/Medium Altitude UAVs and several hundreds of small UAVs, by 2032. As per a Boeing assessment India would be inducting about 1840, mostly single aisle 200-250 seater, commercial aircraft over the same period. Helicopters required for civil applications are potentially in several hundreds to meet the UDAN objectives. In addition, non scheduled operators have requirements for seaplanes, helicopters and private jets. By some estimates the total demand for military and commercial aircraft in India is worth about 536 BUSD over the 15 year period basis the existing security and commercial projections. Given the fact that India is among the leading aviation markets in the world and is likely to strengthen that position, it is incumbent upon us to assume a greater international role in this arena.
- On the supply side, the Indian Aerospace Industry was predominantly centred around the DPSU, Hindustan Aeronautics Limited (HAL) and contributions from Bharat Electronics limited for avionics and Mishra Dhatu Nigam Limited for materials. However, post Kargil, Government of India realised the immense capability of the Indian private sector that could be harnessed, towards Defence and Aerospace indigenisation. The sector was opened in 2001 and there have been progressive changes in the procurement polices over last 13 years, to encourage private sector participation in Aerospace Production. However, the realisation of this indigenisation vision has been found wanting by any standard specially when compared to contemporary growth of this sector in other nations. The industry has time and again projected the immediate need for constructively engaging the private sector with the objective of creating system and platform integrators amongst the private sector companies thereby offering a second line of production of platforms in the country besides DPSUs. As per recent media reports, TATA Advanced Systems Limited is in dialogue with a German company for manufacture of surveillance aircraft on a commercial airframe for defence users.
- HAL is the lone Indian aircraft manufacturing company with its 19 production centres for manufacture and overhaul of aircraft, helicopters, engines, equipment and a workforce of about 31,000 employees. HAL generated total sales in FY 19-20 at about 3 BUSD compared with 94.6 BUSD for Boeing, 79 BUSD for Airbus, Embraer at 6.2 BUSD and Bombardier at 5.7 BUSD etc. While HAL has scaled new peaks in multiple directional growth over the years, development of a robust and healthy aerospace design and manufacturing ecosystem as well as a sustainable supply chain of capable vendors outside its own organisation has been a challenge. HAL, by itself, is unequal to the task of delivering on its orders in a reasonable time frame given its production throughput of 6 LCA/Year, about 12 helicopter/year and with no strengths in either UAVs or for transport and cargo fixed wing aircraft. To its credit, HAL has been awarded a Rs 48,000 crore contract for the production of 83 Tejas fighter aircraft in January 2021 apart from ongoing contracts for Advanced Light Helicopters, Light Combat Helicopters and the Dornier aircraft for the three services and the Coast Guard. HAL also licence manufactures the Su-30MKI aircraft having secured orders for another 12 aircraft worth at a cost of Rs 10,730 crore. HAL, has also been able to generate interest for its ALH and Tejas aircraft from foreign users.
- The commercial airframe segment remains a blank. After abandoning the SARAS project some revival of interest was seen when NAL and HAL partnered to work on a 70-90 seater Regional Transport Aircraft but its progress has been limited. This is the key weak link as the nation is completely dependent upon foreign airframe manufacturers for all its requirements of commercial aircraft.
- In formulating the way ahead for developing the commercial aircraft eco-system in India there are two major considerations. First ‘right sizing’ of aircraft is a key requirement for its commercial viability. A fundamental understanding of three requirements namely (1) Average Stage length (2) Speed (3) Payload (PAX) needs to be ascertained from a comprehensive market study before embarking on making the aircraft specifications. This needs to be balanced with customer preference – cost, convenience or comfort. Nevertheless, given that the country’s average sector distance is only around 350 NM, turboprop aircraft are particularly suitable for linking Tier 2/3 cities to the rest of the country. Second is the issue of buy or make. One approach seeks to make a ‘clean sheet’ design of a 70-90 seater regional transport aircraft indigenously at a targeted budget of Rs 10,000 crs and a delivery span of 10 years. This may be too optimistic as certification from FAA or EASA is a complex process. The Comac C919, developed by China to compete primarily with the Boeing 737 MAX and Airbus A320neo has taken more than 12 years since conception and is yet to receive air worthiness certification though it has received more than a thousand ‘interests’ and about 305 firm orders, mostly from Chinese leasing companies or airlines. India does not have that option. Other programs such as the ARJ-21(China) cost about US$ 1.8 billion, the Sukhoi SuperJet(Russia) US$ 1.4 billion, Mitsubishi Regional Jet (Japan) $5 billion, Antonov 148(Ukraine) $ 500 million(2006 prices) and the smaller HondaJet (Japan) at US$ 1.2 billion and took at an average 12 years to commence trials. Hence, to expect an Indian designed aircraft to be fully operational and Type certified in 10 years at a budget of US$ 1.2 billion seems unlikely. The other school favours buying out an established ‘Type Certificate’ and design for an existing commercial aircraft and commencing concurrent production and design improvements to meet the requirements of UDAAN. There are several candidate designs including the Embraer ERJ 145, SaaB 240, Fokker 2000 etc. The 19 seater amphibious aircraft is yet another machine with great potential given the thrust by the government on introducing sea planes and building water dromes. The strategy would be to induct rapidly and improve incrementally at least technical and commercial risk and cost. This is practical and low cost option and I favour this approach. The table below summarised the options:-
| Sl No | Parameter | Incremental Design | Clean Sheet Design |
| 1 | Disruption | Least | High |
| 2 | Capital Cost | Least | Very High |
| 3 | Time | Fast | Unpredictable |
| 4 | Risk | Very Low | Very High |
| 5 | Technology Development | Medium | High |
| 6 | System Integration Learning | Medium | High |
| 7 | Supply Chain Risks | Least | High |
| 8 | Market | Known | Unknown |
- This model transformed both the Brazilian and the Chinese aircraft industry. Further, the civil aircraft programme should be combined with the Military Transport requirements including the future replacement of the An-32 fleet to develop a manufacturing/global scale MRO facility for a family of aeroengines and propellers from a common OEM.
- It is evident that pursuing military aviation requirements has also not delivered a capability to manufacture civilian aircraft or their assemblies and sub-assemblies to a global scale. It is also evident that the Indian aircraft manufacturing business has not yet matured to a level that can be called world class since the basic ‘eco-system’ has not been developed for the rapid growth of the aircraft manufacturing industry in India. In conceptualizing an aircraft manufacturing ecosystem that can grow harmoniously and develop rapidly, we have to look at all necessary elements that comprise the entire value chain from womb to tomb. This would include design and engineering competencies, manufacturing strengths in aero structure parts from nose to cone and wing tip to wing tip; in Jet and propeller aero engines, auxiliary power plants together with software driven engine and flight monitoring systems; avionics; communications and sensors supported by access to materials etc etc. The list is long.
- In the private sector there is reasonable capacity and capability to manufacture metal alloys and composite aerostructure parts. But there is very limited avionics manufacturing base and there exists a complete blank on under carriage, engines, propellers systems and rotor blades manufacturing. In addition, aerospace grade materials are imported. Skill sets for high technology system assembly and integration, control systems engineering and high technology machining is very limited. These supply chains will need to be created in India through incentivising global OEMs to partner with Indian companies.
- Creating a healthy ecosystem and Tierised Industry for Aerospace in the coming 15 years is a pressing need but also an immense challenge. Whilst it is nobody’s case that the aircraft manufacturing and maintenance business is highly technologically sensitive and key suppliers for sections and assemblies are limited it still behoves on the nation to increase the indigenisation content to practical and sustainable levels. Therefore, over ambitious targets such as seeking 50-70% indigenisation content in a 15 year time frame is impractical since the domestic demand, large as it is, but is still inadequate to make such production streams viable. Depending on the platform whether fixed wing fighter, or transports, or rotary wing-light or multirole an indigenisation content target should be cautiously defined noting thereby that a blanket 50% indigenisation content is non sensical in today’s Global Production network. A more modest and achievable vision would not to dream the impractical but instead to do the possible by clearly identifying what should be sourced locally and what will have to be imported to generate traction in the sector with import substitution of parts and components keeping flight safety and certification issues foremost.
- While there are several opportunities and considerable challenges in developing a world class aircraft manufacturing eco system in India, these have not been addressed holistically and specifically identified on what needs to be done to build commercial airliners in India to not only meet domestic demand but also open up avenues for export. Military aviation alone would not provide a sound road map for building the aircraft industry in India. Civil and general aviation requirements should also be factored in for building the national aircraft manufacturing industrial base. This would of course include creating competencies in associated activity such as MRO, Design and Engineering, Materials, etc.
- Unless all requirements are holistically aggregated and synergistically coordinated towards developing a family of aircraft on a modular design it would not be possible to develop long term risk and revenue sharing partnerships, establish a sound supply chain and reduce costs and unwarranted duplication. In this context, all stakeholders need to congregate and put their collective wisdom in identifying the way forward to build India’s aircraft industry.
Well written article
Few points
1. Micro SME, also have capabilities but are ignored by the government over big names.
2. Buying out design of proven aircraft, for indigenous manufacturing should yield faster results.
3. True open sky policy and tax free manufacturing facilities and maintenance facilities.
4. Vision to encompass Air travel to villages. Thus increasing loads at 2/3 Tier hubs.
5. Competent DGCA staff
Maybe it makes good business sense to not build an entire plane in one country?
Take the example of Japan, and the Boeing 787, unarguably the cutting edge of modern commercial transport. Not only are many critical B787 parts made in Japan, there’s rarely a modern narrow body aircraft that does not have Japanese components today. If Japan can make good quality planes, it’s because she invested in a robust, and profitable ancillary network and adopted global standards in production.
Compare that with RFPs in India where an RFP for an open source MIL specification seal is issued with dimensions measured using a measuring tape.
Our private sector already supplies to the global aerospace supply chain, so what’s stopping our government from approaching them for support. Why is it that I can go to the local market and buy a Craftsman wrench with GST bill, but the military cannot?