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Indian Aerospace Shakeup


The Indian Air Force structures a cargo plane buy—possibly worth $2.6 billion--to strengthen Indian aero manufacturing. Boeing, Lockheed Martin, Embraer, Saab, others may be providing bids.

A number of news outlets reported the Indian Air Force (IAF) issuing a Request for Proposal (RFP) to replace its aging fleet of transport aircraft. As reported in the Economic Times (5/10, Sruthijith) “Less than a month after the defence ministry said it was tweaking key policies to give Indian industry a greater role in production, the IAF has issued a request for proposals (RFP) in a project estimated to be over Rs 10,000 crore, allowing private Indian companies to be the local manufacturers of transport aircraft.” According to the article, previous to this RFP, the state-owned Hindustan Aeronautics (HAL) had a monopoly over such deals. (Editor’s note: a crore denotes 10,000,000 in South Asian/India numbering system.)

Zee News (5/9, PTI) reported “This project will help in widening the capabilities of the Indian aerospace manufacturing industry and creating a wider pool of players who can take up such activities. … The tender has been issued to eight foreign vendors including American Lockheed Martin, Swedish Saab, Russian Rosoboronexport, Spanish Airbus Military, Italian Alenia and Brazilian Embraer and they will have to find an Indian partner to produce 40 aircraft within India….Indian majors such as Tata, Mahindra Defence Systems, Reliance Industries and L & T are expected to partner the bidding foreign partners for the programme.”The Indian Air Force plans on a procurement to replace aging fleet of light transport airplanes.

According to the Business Standard (5/9, Shukla) reported that the “proposal requires the vendor to deliver 16 aircraft in flyaway condition and build 40 in facilities to be established with an Indian partner that it can choose.” According to the article, the proposal was been driven by IAF, which wants to wean itself off an exclusive dependency on the public-sector Hindustan Aeronautics Ltd (HAL).” While HAL has licence-produced a series of fighter aircraft for IAF, including the high-end Sukhoi-30MKI, it has been afflicted with serious time and cost overruns and charged with sub-quality manufacture…. Air Chief Marshal N A K Browne, the IAF chief, has strongly backed this project, hoping it would create a badly-needed aerospace manufacture ecosystem within the private sector.” (5/10) puts the cost of the project in context, reporting the procurement expected to be $2.6 billion.

In related reporting, The Tribune of India (5/22, Mohan) reports that Reliance Industries Limited established a strategic relationship with Boeing. “Boeing’s offset programme in India runs into several billion dollars. Other programmes include C-17 military transport aircraft, Harpoon missiles, Apache attack helicopters and Chinook heavy lift helicopters. Apache and Chinook deals are at the negotiation stage.”

Published Date : 6/3/2013

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