Aerospace sector in India

An Expert's View about Aircraft Parts and Equipment in India

Posted on: 2 Sep 2010

Latest overview of market potential for the aerospace sector in India.

Sector briefing Aerospace Opportunities in India Why India? The Indian aerospace industry is one of the fastest-growing aerospace markets in the world with an expanding consumer base comprising 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, including civil and military aviation, and space are showing significant growth. India?s air passenger travel has been growing at almost 25 percent a year. According to estimates, growth in this sector will outpace opportunities and an introduction to other the global average until 2025. India needs relevant issue. 856 airplanes, worth USD 72.6 billion in the next 20 years, to meet the air travel ?All segments in the Indian demand. aerospace industry, including Research indicates that India will spend civil and military aviation, about USD 35 billion on military aviation and space are showing over the next 20 years because most of its existing fleet needs to be replaced. significant growth.? Find general information on the Indian market conditions on UKTI?s website. The Doing Business Guide for India gives an overview of India?s economy, business culture, potential UK Trade & Investment Sector briefing: Aerospace opportunities in India re-training is a requirement especially for work Opportunities in the private sector and for MNCs. With the rapid expansion in the fleets of Indian carriers, Opportunities for UK aerospace companies in there is also an acute shortage of pilots and India are growing - key areas are detailed training facilities, cabin crew and all aspects of below: passenger handling. ? Supply of components to the main ? Outsourcing and offshoring for domestic producer (Hindustan Aeronautics Ltd design, development and production, in (HAL)) either in collaboration with existing part, driven by offsetting. This opportunity suppliers or through a representative. This overlaps with others already mentioned, and area of opportunity received a tremendous particularly with the supply of software. India boost in 2006, when HAL announced it would offers cost advantages that vary in magnitude set a target to outsource £ 62.5 million worth across the value chain. Cost savings could orders to the domestic private sector. This range between 15 to 25 percent in represents about 35 per cent of HAL?s manufacturing, depending on the type of manufacturing capacity and includes component. outsourcing components, spares, systems for aircraft, engines, ground handling equipment India is emerging as an important destination and accessories. HAL tenders can be found on for global aircraft manufacturers. www.hal-india.com ? Executive Jets and Fractional ? Supply of raw materials (sheet Aircraft Ownership. Increased domestic and metals and forgings). All aviation grade international business travel have now opened materials are imported to India, as there is the market for private jets in India. A number currently one domestic producer (Mishra Dhatu of private airlines, such as Club Air One, are Nigam (MIDHANI), Hyderabad, producer of offering business jet services and shared special alloys for the Defence sector). This aircraft services targeting corporate leaders. opportunity is linked to the one above, as HAL This has increased the demand for small 7-8 also announced that it would stop buying seater aircraft and also for larger business jets materials for private partners in any new for international travel. project. ? Cargo. India has an open sky policy for ? Supply of aerospace-related air cargo. An air cargo hub is being developed software. According to estimates the market at Nagpur in Central India by the Ministry of size of the aerospace technology outsourcing in Civil Aviation. Forecasts in this segment India is currently about US$ 800 million to 1 remains high, and it is expected that the billion, and is expected to triple in the next 3 domestic cargo would grow at 13% in next two years. years. ? Maintenance, Repair and Overhaul ? Ground Handling Services. The (MRO) of civil aircraft, such as Airbus 320 ground handling business in India is estimated and Boeing 737. According to industry?s to be about £ 370 million and is expected to reports, India?s MRO segment will grow at 10 grow at 15% annually till 2011-12. The percent and reach USD 2.6 billion by 2020. government has relaxed the norms for FDI in There is no large MRO facility to cater for civil ground handling services business and has aircraft in India. allowed 74% FDI through automatic route. As of now the MRO activities in the civil An UK company called Menzies Aviation aerospace sector is in a nascent stage as there provides services in two major Indian airports. is no large MRO facilities in India. Airlines in India send their aircraft to the Middle-East and ? Offset Requirements Singapore for most of their MRO needs. The Government in its national defence offset policy requires a minimum 30 percent plough ? Simulation and simulators, training back of foreign outflows from defence and consultancy in all aspects of aviation. procurement into the Indian defence industry. Indian engineering institutions and industry needs exposure to international standards and methods. Indian engineers are available, but UK Trade & Investment Sector briefing: Aerospace opportunities in India This policy allows foreign vendors to choose centres or partnerships in India, with Tier One their Indian offset US and Europe re-locating partner, private or public. As Suppliers from the indicated earlier, the combined offs work to India. ets could translate into an opportunity of between Hindustan Aeronautics Limited (HAL) has a USD40 to 50 billion for the Indian market over long standing association with Rolls Royce and the next 20 years. BAe Systems for licensed production of their products for the Indian Air Force. For example, the purchase of 126 medium multi-role combat aircrafts by the Indian Air Hampson, UK manufactures high-end Force will result in a potential offset components for the aerospace industries from opportunity in excess of USD5 billion. their facility in Bangalore. Preston of UK and Image of Bangalore have set up a JV called Though a formal civil offset policy is still being Image-Preston to manufacture tapes and developed, players like Air India have already stickers for the aerospace industry. There is a taken a lead in this direction by entering into large number of small and medium sized UK an agreement with Boeing with a 50 percent companies which sell their products, ranging offset obligation (allowing indirect offsets also). from fasteners to subsystems, to the aerospace industry in India. ? Modification of Advanced Light Helicopter (ALH): The ALH, also known as The UK Aerospace Defence and Security Dhruv, is already in the production phase and Industries (ADS) has set up an Advanced used by the Indian armed forces and the Coast Engineering Representative Office in Guard. This is a multi-role, multi-mission Bangalore to promote UK ?India partnership in aircraft is designed and developed by HAL. HAL the Advanced Engineering space. has a letter of intent for 300 helicopters from the Indian government and hopes to deliver 24 annually. Variants of the helicopters are also If you have any questions on the opportunities being developed. above, contact the UKTI] contacts named in this report. Business opportunities aimed ? Light Combat Helicopters (LCH): The specifically at UK companies are added daily to HAL has developed a prototype design of a LCH UKTI?s website. These leads are sourced by our for the armed forced. This helicopter is based staff overseas in British Embassies, High on the ALH platform. Commissions and Consulates, across all sectors and in over 100 markets. ? Saras Programme: The Saras is the first Indian multi-purpose civilian aircraft in the You can be alerted to business opportunities on Light Transport Category. The aircraft is a regular basis by registering on the UKTI designed by National Aerospace Laboratory, website. Find out more on UKTI?s business Bangalore. The Saras is still under opportunities service on the UKTI website development. The plane is expected to be certified by 2011. The Indian Airforce has placed an order for 15 aircraft. The planes will be manufactured by HAL. ? Regional Transport Aircraft: NAL also plans a 70/90 seater Regional Transport Aircraft in which it plans to have foreign and private partners. The Indian government has given the go-ahead to undertake a feasibility study. ? UK companies/organisations in India Almost all global aerospace companies such as Airbus, Boeing, BAE Systems, Rolls Royce, GE, Safran, have offices, R&D centres, captive UK Trade & Investment Sector briefing: Aerospace opportunities in India Major events and activities UKTI contacts Farnborough Airshow Sunil Kumar M Contact: Neil Semple Senior Trade and Investment Adviser Email: neil.semple@ukti.gsi.gov.uk British Deputy High Commission Time: July 2010 Tel: (0091 80) 22100200 Email: sunil.kumar@fco.gov.uk Advanced Materials Mission to India www.ukti.gov.uk Contact: Sunil Kumar M Email: sunil.kumar@fco.gov.uk Neil Semple Time: August/September 2010 Head of Aerospace UK Trade and Investment UK Aerospace suppliers Mission to India Tel: (0044 141) 2283614 Contact: Paul Calver / Sunil Kumar M Email: neil.semple@ukti.gsi.gov.uk Email: paul.calver@pera.com www.ukti.gov.uk sunil.kumar@fco.gov.uk Time: September 2010 AeroIndia, 2011 Contact: Neil Semple / Sunil Kumar M Email: neil.semple@ukti.gsi.gov.uk sunil.kumar@fco.gov.uk Time: February 2011 Find full details of all events in this country and sector on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Aerospace opportunities in India Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Indian market are advised to you to meet contacts and promote your undertake as much market research and company in the Chinese market planning as possible in the UK. UKTI?s team in India with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Chinese market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Aerospace opportunities in India
Posted: 02 September 2010

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