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Aero India 2015

Tie up with Indian SMEs with proven track record at Aero India 2015

The Indian Aerospace and defense manufacturing sector is at the cusp of change today, with the entry of large private players and strategic alliances, mergers and buy-outs being the order of the day. Aerospace giants like Airbus, United Technologies Corporation, Lockheed Martin and Dassault Aviation have been closely looking at the Indian market and companies they can partner with. As these companies look to build an ecosystem of Indian firms whom they can outsource their global work at competitive rates and through whom they can cater to the domestic market when orders from the Indian Armed Forces materialise, they can no longer afford to depend on the monopoly public sector giants or a few large players.

In fact, it is in the interest of these global corporations to recognise early that these form the tip of the iceberg and hundreds of Small and Medium Enterprises in India support public sector organisations like HAL and contribute significantly to India’s Aerospace and Defense manufacturing sector.

With the increase in the FDI limit to 49%, global leaders in A&D manufacturing are now eager, more than ever before, to add Indian suppliers to their global supply chain. This would definitely benefit them as they are likely to find some robust partners in small and medium sized Indian enterprises that have executed indigenous projects and have proven expertise, spanning many years.

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Digging a little deeper will unearth a few such hidden gems, correcting the misconception that SMEs operate at the lower end of the value chain. There are a few Indian SMEs who are not just component manufacturers but are seen adding value at multiple stages including design, development and high value manufacturing in the aerospace sector. In addition, several Indian SMEs now have the strong technological base to meet global demands and standards, an international business outlook, a competitive spirit and a willingness to restructure which makes them a perfect partner to look out for.

Large domestic players are also broadening and strengthening their competencies and resource base through the process of acquisitions and mergers. They are also looking to forge partnerships with key suppliers in the 2nd tier. The Make in India campaign has undoubtedly added impetus to their growth aspirations. It is important that SMEs take stock of this paradigm shift and gear up to leverage the opportunity.

Seven essentials to look out for in an Indian SME partner:

  1. Proven track record in the Aerospace domain.
  2. Capability to design and fabricate jigs and fixtures required for production and testing.
  3. Evidence of a strong and robust quality assurance culture built into the organization.
  4. An organizational culture that encourages learning and training of its employees and managers.
  5. Passion and sincerity of purpose among its main promoters in the field of A&D.
  6. Adherence to committed delivery schedules.
  7. Professionalism and high ethical standards in their communication and operations.

To truly leverage the combined potential of a liberal offset policy, India’s advantage in skilled manpower, and relatively low cost manufacturing, it is essential to integrate SMEs into the ecosystem. Aero India 2015 could just be the right opportunity for the industry to move in this direction.

Aero India 2015

Indian Aerospace SMEs ready to match Global Quality Standards

This is the most appropriate time for our prime minister’s campaign of Make In India. We need to manufacture not only our own consumer durables and industrial products, but also the products required for the Aerospace & Defence sector. In fact it’s more appropriate for Make In India to be applied to the Aerospace and Defence since it involves the security of our nation and the self-reliance of our nation to defend and use our own equipment. We have been talking about self-reliance for more than five decades now.

But it’s unfortunate that we have not been able to extend the indigenous content of our arms and equipment including aircraft and battle tanks beyond 60%. It’s therefore high time that we all put our heads together. There is no dearth of talent, there is no dearth of knowledge, there is no dearth of man power, in fact India boasts of the largest engineering manpower talent and our engineering manpower is catering to the needs of global companies for application of their ideas and capabilities in products that are developed abroad. So why not we do it for ourselves? It’s therefore essential that the Indian SMEs are integrated into this whole plan of action.

“The Indian SMEs had proven themselves beyond any doubts by their contributions in the automotive sector and we have now reached a stage where Indian automobiles and their parts are exported globally”

So why can’t we do this for the Aerospace sector too? The Indian SMEs have their own core competence in their domains such as hydraulics, pneumatics, mechanical machining, fabrication, electronics, etc.

So it’s only a small quantum jump that they need to take to integrate themselves into the Aerospace & Defense sector and provide the most reliable, most cost effective and made in India products for not only the Indian market, but also export them abroad.

 

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Challenges – Design and manufacture in A&D

Design and manufacture of civilian aircraft differs significantly from that of Military aircraft in that the certification processes are completely different. Military aircraft are certified as airworthy by CEMILAC, a wing of the DRDO, whereas civil aircraft are certified by DGCA. The standards applicable for each of these categories are also vastly different since safety is of paramount importance in the case of civil aircraft that transport civilian passengers. Further, civil aircraft would need to be meet certification requirements of FAA and EASA in case these aircraft are to fly internationally. Since Indian aerospace companies have very little experience in civil certification procedures coupled with the fact that the civil aircraft manufacture is literally non-existent in India at the moment, this would be a much tougher proposition to tackle than military aircraft.

The aircraft industry needs to adopt the consortium approach rather than have individual companies going it alone.

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Aircraft design, development and certification is a highly complex, technology and capital intensive and long gestation industry that can stretch beyond 10 to 15 years or more. It is therefore, highly unlikely that the private sector would be willing to risk investments into this business all by itself. The best approach would be for the formation of a consortium of large, medium and small companies with proven expertise in various domains that can pool resources and synergise competence. Even the government-owned Hindustan Aeronautics (HAL) needs to adopt this model to create a win-win situation among its customers, vendor partners as well as itself.

The Union government will have to provide some incentives either as grants or subsidies to facilitate and nurture the growth of not just one, but a few such consortia. This would ensure that there is a competitive environment that prevents complacency or cartelization. In addition, these consortia can be rated on their successful contributions which will entitle them to more grants for future projects. This support even for a limited period of 5 or 10 years could foster the growth of clusters and consortia, beyond which they would be self-sustaining.

The original article appeared on The Times Of India.

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Bengaluru Company develops technology for IAF

Bengaluru-based aero defence equipment maker Radel Advanced Technology (RATPL) is eyeing huge opportunities in the defence sector this year and is developing a series of Indigenous technologies for the Indian Air Force (IAF).

“An Electronic Line Replaceable Unit (LRU) for the Dornier (maritime reconnaissance) aircraft is under development and has successfully undergone functional testing at Hindustan Aeronautics Ltd (HAL). It is now in the qualification testing phase”, the company’s managing director, G. Raj Narayan, told IANS.

Also, the company is awaiting integration and flight trial reports from the IAF for an electronic bomb-release controller used on fighter aircraft. “Once this is completed, the unit will enter serial production,” Narayan said.

RATPL has increased the life span of the Jaguar fighter aircraft by indigenizing the distributor used on its rocket pod. The IndianSME  has used modern electronic systems to replace the original, which is now obsolete.

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“This unit has undergone successful certification following into serial production,” Narayan said.

The company is also working on the repair of a high voltage power supply component of the Indian Navy’s helicopters.

“The project involves reverse engineering and design of a new power supply module using current electronics technology. The project is nearing completion and the finalized unit will be delivered to the Navy in a couple of weeks,” Narayan said.

The company is certified by CEMILAC (Centre for Military Airworthiness Certification) and has executed 20 Indigenization projects for HAL and the IAF.

It has already designed, developed and supplied a number of ground rigs for testing the avionics on board the indigenous advanced light helicopter (ALH) and the Sukhoi Su-30MKI combat jet. Multiple numbers of these have been supplied to HAL and are operating across IAF bases.

“Repeat orders for these are being periodically executed by us to meet the needs of HAL, “Narayan said.

The original article appeared on Business Standard.

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Make in India Campaign and Indian SMEs: The Fine Line

The biggest highlight of the year for the aerospace manufacturing industry and Indian SMEs without any doubt has been the announcement of the ‘Make in India’ campaign by our Prime Minister Narendra Modi. Not only has it galvanized the industry in India, but it has also given a renewed confidence to foreign player,s resulting in increased interest from foreign investors to invest in local manufacturing. The Make in India initiative has given new hope to the Indian SME sector and has come as a boost to the sagging morale of Indian SMEs and Manufacturing industry. After the introduction of the Make in India campaign, the industry has started seeing visible changes to the functioning of bureaucracy across the country.

The Union Government has been making all the right noises and is also demonstrating the willingness to take all steps to improve the economy on every front. Works and policies initiated and proposed by the new government in its first few months in power have been very encouraging for the aerospace manufacturing sector.

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Several Indian SMEs have overcome the long gestation period associated with the Aerospace & Defence sector and now look to take a leap forward with more prestigious projects.

Tweet this: “The Make in India’ campaign, both in the industrial as well as the A&D sectors, is bound to open up huge opportunities for SMEs with strong design and development capabilities. Radel hopes to capitalize on these and grow into a nationally recognized organisation.”

The successful flight testing of an in-house designed product of Radel in a Jaguar aircraft of the IAF, leading to its certification for regular use in all Jaguars, was the high point of Radel’s performance in 2014. Radel hopes to repeat the above success with another product, which is currently under an advanced stage of testing for the IAF, in 2015. Overall, Radel hopes to grow by at least 60 percent and look for opportunities in the global A&D market.

Demand creation is also a big expectation. While consumer demand will get generated with inflation getting under control, it is critical to jump-start infrastructure, which can and should be the engine of growth for some years to come. Big steps like labour reform and land acquisition would be areas of high importance. They might get addressed this year if the stakeholders come together to work towards the common good.While it will be incorrect to expect all of that to happen in one year, it is encouraging to see a clear sign of a strong beginning of this cycle in 2015.

Aero India 2015

Indian SMEs set to battle it out for Rs 18,000 crore defence pie

A $3 Billion opportunity for Indian SMEs and Defence MSMEs has been created by Defence Procurement Policy 2013 and the Make In India Campaign. Numerous offsets in the three wings of the armed forces are expected to be executed in the next five years.

According to defence MSMEs, the two key initiatives have opened up an estimated Rs. 90,000 crore business opportunity, identified as the offset opportunity for defence players in public sector undertakings (DPSUs) and also for the MSME sector over the coming five-year period.  It is reported that prospective business worth Rs.72,000 crores has emerged from IAF (Indian Air Force), with the Indian Navy presenting another Rs.13,500 crore possibility. The prospect from the Indian Army would be around Rs.4500 crore. In the last few years the total value of defence offsets contracted in the last few years is valued around Rs.28,800 crore. The Indian Air Force has signed contracts worth approximately Rs.21,600 crore, the Indian Navy worth Rs.5,064 crore and the Indian Army Rs.144 crore.The MSME sector could expect business worth of Rs.18,000 crores, which would be 20 percent of the Defence sector’s overall projection.

The most promsing area that should encourage SMEs in the defence segment is the indigenous manufacture of parts and
sub-assemblies to replace obsolete original equipment (the MRO sector). It includes the design, development and manufacture of complete equipment as a replacements. Serious efforts have to be made to attract SMEs into this obsolescence management sector. In turn, SMEs should rise to this occasion by raising their standards of quality and reliability of  parts and assemblies that are manufactured by them, as supplies to larger players. Large organisations can then outsource in parallel to multiple efficiently managed MSME organizations.

This kind of involvement will certainly reduce the cost and the time of execution of projects, which are chronically plagued by delays today.

IndianSMEs, AeroIndia 2015

Factors and Challenges Related to the Growth of Indian SME

Indian SMEs have been a hot topic of discussion during last couple of months and have attracted the attention of entrepreneurs, bureaucrats and industrialists. India’s Defence budget has been growing year after year and has reached Rs.2,290 billion for 2014-2015. As a result, the opportunities for Indian SMEs (Small and Medium Enterprises) have also grown, leading to increased focus of policy makers and Indian Aerospace SMEs on this sector.

A significant thrust has been indicated in the union budget 2014-15 for the growth of Indian SMEs. After agriculture, the major contribution to the GDP (40 percent) is byMSMEs, who also have the largest workforce. MSMEs in all sectors are known for specific distinctive advantages like low-cost operations, unique skill sets, innovation, flexibility and agility. Indian SMEs nowadays are considered to be competitive and focused.

There has been active participation of Indian SMEs in the last decade in the defence arena. MSMEs play a major role in the defence ecosystem by producing sub-systems and components.

It has been estimated that the Indian defence sector currently comprises over 6,000 MSMEs which are fast integrating themselves into the supply chains of national and international majors including the PSUs.

Although the majority of them produce items of low value addition, a few small enterprises have proved their potential by producing sophisticated high quality products at competitive prices.

 

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The Opportunities

The Defence Procurement Policy 2011 had encouraged indigenous manufacture of defence equipment. Further changes in DPP 2013 have been made, to give preference to ‘Make in India’ across all categories. Indian enterprise should take indigenous design and manufacture as a challenge to grab the multi-fold business opportunity. This may bring a change – from dependence on imports to self-reliance. It will certainly yield technology spin-offs to various other fields such as automobile and consumer sectors.

Nearly 50 percent of defence equipment that are held by IAF are obsolete. They either need replacement or upgradation to extend their useful life. An opportunity of around US$10 billion exists in this segment. Obsolescence management is a key area where Indian MSMEs  can play a major role. A few Indian SMEs have developed indigenous sub-assemblies as part of obsolescence management, for both defence forces and defence PSUs.

The Challenges

Constraints faced by majority of MSMEs referring to the A&D sector are

  • Lack of awareness and exposure to stringent performance requirements such as high quality, reliability, efficiency and ruggedness to perform in harsh environments.
  • Lack of knowledge of military systems and platforms.
  • Lack of design skills for development of these products or their components.
  • Lack of training facilities for skilling the workforce, including engineers, in this specialised domain.
  • Lack of access to specialised raw materials and testing facilities associated with this sector.
  • Lack of funding to tide over the long gestation period characteristic of this sector.

Need for an A&D classification for MSMEs

The decision to bring out a new policy for MSME by our Union MSME Minister, Kalraj Mishra will open up new opportunities for all  stakeholders. Committees have been formed by Ministries of Finance, MSME and RBI to address all issues relating to the sector and it is hoped that they will provide a comprehensive policy that will reflect the changing business environment. Considering all the problems faced by entrepreneurs in this sector, a special category to classify ‘A&D MSME’ s would encourage more entrepreneurs to enter the sector.

Special schemes for SMEs in Aerospace and defence sector

A few steps that can be taken to encourage MSMEs in the sector are:

1. During the procurement process, whether of PSUs or armed forces, SMEs with aerospace/ defence skills, experience and proven track record, should be given weightage.

2. SMEs with proven track record in a particular field (such as machining or electronics or hydraulics, etc.) but lacking experience in the A&D arena, to be given exposure to specialised processes and requirements of this sector.

3. Commonly used materials and standard parts (For example, fasteners) of approved grades and quality that either need to be imported or manufactured within the country can be consolidated by creation of a raw material bank, operated and managed by NSIC or a similar organisation.

4. This sector is known for the long cycle time, from order to realization of sales. Special funding schemes taking this factor into account, would be a major step in mitigating one of the main elements discouraging MSMEs in this sector.

A&D MSME Clusters — the way forward

MSME clusters for the high technology A&D sector has to be facilitated. Government should encourage, promote and nurture these clusters through funding, training and support schemes. These clusters could also be virtual which form a supply chain for PSUs and defence organisations. Members in virtual cluster will be able to interact and share business and ideas mutually. There is no need for them to be co-located as a cluster. Members of the clusters would then be able to be use their skills to design or manufacture different parts of equipment. Growth of every individual in the clusters can be increased by pooling of complementary domain expertise. This would go a long way to establish the eco-system which is essential for successful and holistic implementation of indigenisation programs.

For indigenous defence industry

As an extension of the cluster model described in the preceding paragraph, a PSU such as HAL or BEL, or the maintenance wings of the armed services could financially partner with a cluster for mutual benefit. This could be a successful implementation of the PPP model that many governments have talked about in the past. This PPP model would be able to address many of the problem areas elucidated above, including the issue of exposure and training in specialised domain areas of A&D. The PPP eco-system will provide the much required impetus to the MSME sector.

While the new PM’s objective of turning the country from a major defence importer to an exporter opens up a much larger opportunity for the MSMEs, going far beyond the cause of self-reliance, there are challenges aplenty. However, these are not insurmountable if all the stakeholders come together and synergise for the common good.

India is today the world’s largest military equipment buyer. This situation can be converted into a multi-fold business opportunity if indigenous design and manufacture is taken up as a challenge by Indian enterprises!

 

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Your Stamp in the Sky

Extract from an article that was published in the New Indian Express:

The Narendra Modi government recently allowed private players based in India to manufacture equipment for the Indian Air Force. In July this year, the Defence Ministry approved the construction of 56 transport aircraft by private players. This is the first time that the private sector will design and manufacture aircraft and will not be supported by the government enterprise, Hindustan Aeronautics Limited.

There has been some shift since the new government is encouraging participation of the private sector. It was not a dynamic environment before, but now we can expect some change and emergence of indigenous technology in the industries.

This has ignited interest in courses on aerospace.

Demand for the course

In India, you can do a course in Aerospace/Aeronautical Engineering. BE/ME, BTech/MTech and PhD-level courses are available in the country. Aerospace engineers are required to have both theoretical and practical knowledge. So, most of these programmes will focus on maintenance systems, production planning and control, airframe instruments and industrial management.

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“Studying the subject is very interesting as it has practical applications and is challenging compared to computer science or electronics engineering,” says Lynden Martin Gomez, an aeronautical engineering student who graduated last year from KCG College of Technology, Chennai.

Tweet this: “Students get attracted by IT companies and take up jobs there while the passionate few go into core engineering industries” 

Career scope

Aerospace engineers are paid from Rs.15,000 to Rs.50,000 a month depending on the firm and their experience. You can become a general manager, aircraft design engineer or a technician. Some companies where you can seek jobs include Indian Space Research Organisation, Defence Research and Development Organisation, Hindustan Aeronautics and National Aeronautics Labs. While there are many job roles and companies that take in such engineers, “it was hard finding a job immediately after graduation,” says Lynden.

“Very few who come to us have hands-on capabilities. They seem to have pre-conceived ideas that seem dull. Students should be encouraged to innovate and design new equipment.”

 

The original article appeared in the  NewIndianExpress

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Why doesn’t India have really good, indigenously built fighter jets ?

A modern fighter aircraft is a very complex machine. It consists of a high performance aerodynamic airframe, constructed using a variety of modern materials such as aluminium and titanium alloys, carbon/glass fiber composites, etc., and a very high performance jet engine involving cutting edge technology and high precision machined parts. This only constitutes the basic flying platform, which is then equipped with a large variety of systems involving hydraulics, pneumatic, avionics, electrical and weapons related equipment to make it an efficient, sturdy, rugged, reliable, dependable, potent and safe machine. In fact,

“The quality of the systems and weapons fitted on a fighter aircraft is what really determines whether it is a “really good” or a mediocre aircraft”.

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An equipment indigenised by Radel that fires rockets from Jaguar aircraft

The design and development of a modern fighter aircraft needs a whole set of skills, capabilities, technologies and infrastructure extending over a very wide engineering spectrum. Further, due to the rapid advances in engineering technologies these days, such an industry would need to assimilate technologies as well as innovate their own continuously through R&D.

All these require highly qualified and trained engineers and scientists, who are encouraged and supported with the best of environment, infrastructure, financial backing and most importantly, quality leadership. Such an ecosystem has been sadly missing in this country all these years. With HAL being the exclusive PSU engaged in the development and manufacture of military aircraft for the last six decades, there has been very little opportunity for the private sector to get a foothold in this sector. One must also appreciate the fact that an aerospace industry is highly capital intensive with long gestation periods and hence no private sector organisation would have been able to afford the investments as made by the Govt. of India into HAL.

It is only in the last 15 years that large Indian business houses have evinced interest in foraying into aircraft manufacture. The synergy arising out of the joint participation of various aerospace organisations such as NAL, ADE, DRDO and HAL, by itself has resulted in a quantum jump resulting in the development of the LCA. This needs to be carried further with the active inclusion of the private sector, particularly in the areas of development of the airborne equipment falling under various categories.

What is required is a holistic and planned approach to developing the indigenous capability that synergises the strengths of the Govt. controlled aerospace organisations with the private sector companies that possess proven domain expertise in each of the engineering areas such as electronics, electrical, hydraulics, mechanical, pneumatic, and software engineering.

MSME

Time to lift MSMEs from ‘garage-type’ operations in defence

Medium, small and micro enterprises (MSMEs) in the defence and aerospace sector can be ‘game changers’ by contributing their bit to the Prime Minister’s ‘Make in India’ call, but fear they may end up in ‘garage-type operations’ if the required support is not extended.With modern technology in their hands and an instant connect with global trends, what MSMEs need most is credit support and hand-holding by bigger players in the sector.

“There are immense capabilities in MSMEs in aerospace and defence, but they are restricted to being vendors for low value-added services”.

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One way to tap into the huge talent pool could be to have special classification of “defence MSMEs’, with special funding and support mechanisms, such as exclusive clusters tied to bigger players in the sector, such as PSUs and the Tata’s.

What has raised hopes among MSMEs in the sector is the ₹100-crore technology fund announced by Prime Minister Narendra Modi. The feeling we get is that a part of this fund will be apportioned to critical projects that involve technology, indigenisation. Also, about a 75 per cent grant for design development… if that happens, it will be great news.

“If India is serious about being self-reliant in defence production, it needs to nurture and offer an enabling ecosystem to MSMEs,” unless this is done, India may have to face “crippling effects’ of over-reliance on imports, which often leads to buying outdated foreign technology.

“In the so-called technology transfers that happen, they only give drawings, no design. And most often, the technology that is given is outdated, at least two generations down, and they make a couple of billion dollars,”

India needs to develop technology on its own. It has the expertise and knowledge, all it needs is mapping of MSMEs in the defence sector and offer credit support.