India to Become Credible Aerospace SME Hub

By admin • September 17th, 2010

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India Defence Online, New Delhi — Indian small and medium enterprises (SMEs) are set to gain substantially from the growing aerospace business in the country that will arise from the offsets policy. According to an estimate by the reputed PricewaterhouseCoopers, India will spend $25 billion on commercial aircraft and $100 billion on defence until 2014. India is importing passenger and military aircraft in large numbers and the SMEs are eyeing the business that the offsets policy will bring for them.

A host of units that are opening up in the southern Indian state of Karnataka where an aerospace-specific special economic zone (SEZ) is being developed will provide business for the SMEs. About 55 per cent of the land will be allotted to companies for setting up factories and aviation maintenance, repair and overhaul (MRO) activities will be undertaken as well. So far, the state-owned defence suppliers Bharat Earth Movers Limited (BEML) and Hindustan Aeronautics Limited (HAL), Mahindra and Mahindra, Dynamatic Technologies and Japan’s Amada have been allotted land.

Karnataka has become a lucrative destination for aerospace companies due to the eco-system of public sector units engaged in aircraft manufacturing & development, a large number of IT companies and presence of precision equipment manufacturers. The creation of an aerospace park near the Bangalore international airport at Devanahalli on the outskirts of the city is created to attract global investments in the aerospace sector. About 1,000 acres of land was acquired to build world class infrastructure for the aerospace industry and about 250 acres of the land is earmarked for a special economic zone (SEZ) in the aerospace hub. These units in the SEZ will cater to domestic demand as well as the export market.

In fact, the business in the aerospace sector has been proliferating and Bangalore-based companies have been supplying machining centres for making moulds, prototyping models, forging dyes and precision mechanical parts to them.

The SMEs which supply aerospace components will gain by supplying structural parts to international firms like Airbus and Boeing as part of the offset policy. In fact, SMEs will also find a role in contributing cutting tools for the machining of parts and engines of Sukhoi fighter jets manufactured by HAL.

Since the aerospace sector requires advanced and sophisticated components, the Indian Machine Tool Manufacturers’ Association (IMTMA) has urged the government to assist them in setting up a corpus fund to enable the adoption of new technologies. At present, the SMEs are lacking in skills and technology to develop high-precision components. In fact, it must be the Indian government’s prerogative to mitigate the woes of the SMEs through better policies and incentives. The SMEs in the aerospace and defence industry should focus on building complementary activities and capacities and become innovative. In addition, the licensing procedure for defence manufacturing should be streamlined to encourage the entry of SMEs in the defence industry.

Interestingly, the Department of Science and Technology and Boeing have set up the National Centre of Aerospace and Innovation Research (NCAIR) in Bombay which will carry out work on innovation and research on avionics and structures in order to build an ecosystem for the manufacture of aerospace components.

Source: India Defence Online


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