Aerospace sector in India

An Expert's View about Defense Aircraft in India

Posted on: 24 Aug 2012

India was the world largest importer of Defense equipment in 2011.

Aerospace sector in India The Indian aerospace industry is one of the fastest-growing aerospace markets in the world. An expanding consumer base comprises of airlines, businesses and defence requirements. The rapid growth of this industry has attracted major global aerospace companies to India. All segments in the Indian aerospace industry are showing significant growth. Market overview India’s air passenger travel has been growing at almost 18 percent a year. According to estimates, growth in this sector will outpace the global average until 2025. India needs 856 airplanes, worth US$73 billion in the next 20 years, to meet the air travel demand. It was the world largest importer of Defence equipment in 2011. India has already made Defence purchases worth US$25 billion in the last four years and another US$42 billion are in the pipeline. Research indicates that India will spend about US$35 billion on military aviation over the next 20 years because most of its existing fleet needs to be replaced. Key opportunities ξ HAL (Hindustan Aeronautics Limited) is poised for huge growth and will be looking for the supply of components for future projects. Their annual turnover is set to double in the next decade ξ HAL seeks to outsource at least 50% of its requirement and seeks to transform its role to being a large solution provider in the domain. ξ All aviation grade materials are imported into India, as there is currently only one major domestic producer ξ Supply of aerospace-related software. According to estimates the market size of aerospace technology outsourcing in India is currently about US$800 million to US$1 billion, and is expected to triple in the next 3 years. ξ Maintenance, Repair and Overhaul (MRO) operations. Driven by domestic demand and potential regional market, India is expected to be the fastest growing MRO market over next 10 yrs. ξ MRO activities in the civil aerospace sector are at a budding stage as there are no large MRO facilities in India. Airlines in India send their aircraft to the Middle-East and Singapore for most of their MRO needs. ξ Opportunities in design, development and production as India offers cost advantages that vary in magnitude across the value chain. ξ The Government in its national defence offset policy; stipulate a minimum 30 percent plough back of foreign outflows from defence procurement into the Indian defence industry. This policy allows foreign vendors to choose their Indian offset partner, private or public. The purchase of 126 medium multi-role combat aircraft by the Indian Air Force will result in a potential offset opportunity in excess of USD 5 billion. Latest export opportunities in Aerospace Latest export opportunities India Getting into the market Public procurement is a key route into the Defence aerospace market which is handled by Public sector companies. The Bids are awarded on the basis of reply to tenders through a two stage bid process. Price is the most important factor in deciding the L1 (the lowest price bidder). Technical and regulatory standards are offshoots of FAA and European standards with significant modifications to suit the Indian requirement – so UK companies are advised to familiarise themselves with specifications at the earliest opportunity. In general, quality and technical standards are important but price will decide the bid. Dealing with PSU can be fraught with delays. Private sector dealings are varied, small companies (in the SME space ) will be extremely price sensitive, large organisations with long term strategic vision will be very focussed on building capability More about doing business in India Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. Venkatesh Janakiram Senior Trade and Investment Adviser British Deputy High Commission Tel: (0091 80) 22100200 Email: Janet Tingle Head of Aerospace UK Trade and Investment Tel: + 44 (0)141 228 3617 Email: Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events in Aerospace sector Major Events Farnborough 2012 9th July to 15th July Visit the Farnborough Airshow 2012 Website Aero India 2013 6 Feb to 10 Feb in 2013 Bangalore India Visit Aero India 2012 Website Useful links More about OMIS and other UKTI services for exporters
Posted: 24 August 2012