The Indian Air Force plans to procure equipment and platforms worth $150 billion (Rs.9 trillion) in the next 15 years, Air Marshal P.P. Reddy, Director General (Inspection & Safety), Indian Air Force, said at the inaugural session of the 8th International Conference on ‘Energising Indian Aerospace Industry’ co-organised by the Confederation of Indian Industry and Centre for Air Power Studies, in association with Indian Air Force, in New Delhi recently.
The IAF’s budget for 2013-14 is approximately Rs.18,900 crore, a major portion of which goes towards the procurement of aircraft, engines and equipment. In order to make this sector more attractive to investors, Reddy said that the Indian industry should be given tax holidays and a more industry-friendly import and export regime. R&D funds should also be made available to private sector companies, he felt.
The air force is currently implementing a modernisation programme that will replace and upgrade some of its ageing and outdated equipment with advanced equipment. The IAF is already procuring and developing aircraft and weapons and associated technologies and infrastructure. Some of the major equipment currently under procurement and development include fighters, transports, trainers, helicopters, unmanned aerial vehicles, surface-to-air missile systems, cruise missiles, and airborne warning and control systems and airborne early warning and control systems.
IAF is expected to complete 75 per cent of its modernisation programme by 2022 or at the end of the 13th Five-Year Plan, Air Chief Marshal NAK Browne said prior to the air force’s 80th anniversary last month. In the last five years, under the 15-year modernisation programme, IAF spent around $30 billion (Rs.150,000 crore) on procurement contracts.
For now, the air force is focusing on completing projects in the 12th Plan that will see the induction of state-of-the-art platforms along with training and infrastructure, upgradation of air bases and retirement of numerous legacy systems. The induction of Dassault Rafale multirole fighter acircraft and the first two squadrons of Tejas, the light combat aircraft, will be done during this plan period. The 12th Plan will also see the induction of SU-30 MKI fighters, C-17 Globemaster and C-130 J Hercules transports, Phalcon AWACS, DRDO AEW&C and Multirole Tanker Transports.
India cannot become a major power without a flourishing aerospace industry, Air Marshal Vinod Patney (retd), Director, Centre for Air Power Studies, said, adding that SMEs have not enjoyed the benefits of defence offsets and government support. He felt that SMEs should get due attention from the government and large-scale companies. “The business model must undergo change. Transfer of technology and licensed production should be looked at as a stopgap arrangement. FDI limit should be relaxed and private sector’s greater involvement is required,” he observed at the conference.
Satish Kaura, Co-chairman, CII National Committee on Defence and Aerospace, and Chairman, Samtel Group, concurred: “We need to have an effective mechanism for transfer of technology in place. Thereupon, we will have to focus on capacity building with the aim of emerging as a defence and aerospace export hub. We will have to make sure that Indian SMEs become a part of the global supply chains of major defence equipment producers by leveraging the cost arbitrage in component designing and manufacturing in India.”
S.K. Mittal, General Manager – Business Development, Hindustan Aeronautics Ltd, pointed out that while HAL had 2,400 Tier-3 suppliers, there was a need to have Tier 1 & 2 suppliers. Further, he said that the best of aerospace technologies could not be parted but had to be developed. Besides, a majority of raw material was being imported and this trend needed to be reversed, he added.
Anjan Das, Executive Director, CII, said that the R&D component, as per government’s definition, constituted a negligible portion of the overall spend on product development, testing, trials and pre-commercial production of Indian companies. The tax rebate needed to be more broadbased and should also cover cost involved beyond research. All the stakeholders should give more priority to aerospace and defence R&D and manufacturing as an integrated piece to ensure orders to industry that puts money into R&D. Global partnerships in co-development and co-manufacturing would be the key, he noted.