Defence

Tata Group needs more time to get a fix on Airbus aircraft assembly line

Photo: Airbus C295 for Indian Air Force.

By N. C. Bipindra

New Delhi: Before signing the contract, they were unsure. After pocketing the deal, they are undecided.

“We need some more time,” was the matter-of-factly reply from Indian defence manufacturer Tata Advanced Systems Limited‘s (TASL’s) managing director and chief executive officer Sukaran Singh to a question on the location of his company’s assembly line for the Airbus C295 aircraft.

European major Airbus Group had just this morning signed an estimated $3-billion deal with the Ministry of Defence to supply 56 C295 aircraft to the Indian Air Force (IAF), 40 of which is to be assembled in India, with significant indigenous manufacturing of the aircraft’s parts, components and systems.

The question on the location was quite natural, as the Indian aerospace and defence industry is keen to know if TASL would choose the provincial election-facing Uttar Pradesh where a hugely popular ruling party heavy weight Yodi Adityanath is the Chief Minister, or Gujarat, the home state of rock star Prime Minister Narendra Modi.

Uttar Pradesh, obviously, has a declared Defence Industrial Corridor. But, so does Tamil Nadu, which also boasts of very successful Tier-II, Tier-III and Tier-IV production houses for the Indian aerospace industry that is in close proximity to Bengaluru in the neighbouring Karnataka state, the present day epicentre of India’s aerospace manufacturing sector.

But Sukaran Singh was unwilling to even indicate where the assembly line could be. No. At least, not now. “We have looked at over a 100 locations in India in the last few years — from the perspective of air strip infrastructure, accessibility, social indicators, weather, airspace and more,” he said.

Yet, TASL is not close enough to even zero in on the province where they would like their assembly line to come up. “We may have to decide in the next few months.” Because, the Indian multi-sectorial major’s turn to meet delivery deadlines will begin soon.

Of course, the announcement on the Tata facility could happen in Gujarat. Don’t mistake it for the assembly line location. We are pointing at host-state of March 2022 DefExpo at Ahmedabad.

“We got to ensure all the stake-holders — Tata Group, Airbus Group, the government, the locals are all happy.” That’s as cryptic as it can get.

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The Indian government said in a statement that it has also signed an offset contract with Airbus Defence and Space under which the European aerospace major will discharge its obligations through direct purchase of eligible products and services from Indian offset partners.

Airbus India’s president Remi Maillard said that his company was sourcing nearly $650 million worth of products and services from India already, apart from operating an engineering centre in Bengaluru and a pilot training centre in Gurugram. “The C295 contract is a precursor and will unlock opportunities in India in defence,” Maillard said in reference to all the lost opportunities over the last 60 years. Read about it here.

The induction of C295MW will be a significant step towards modernisation of the transport fleet of the IAF. It is a 5-tonne to 10-tonne capacity aircraft with contemporary technology,” the defence ministry statement said.

“The aircraft is capable of operating from semi-prepared strips and has a rear ramp door for quick reaction and para dropping of troops and cargo. The aircraft will give a major boost to tactical airlift capability of IAF, especially in the northern and northeastern sector and Andaman and Nicobar Islands.”

The project will provide a major boost to the ‘Atmanirbhar Bharat‘ initiative of the Indian government that offers a unique opportunity for the Indian private sector to enter into technology intensive and highly competitive aviation industry.

Of the 56, forty aircraft will be manufactured in India by Tata consortium. All the deliveries will be completed within 10 years of signing of the contract. Sukaran Singh made an important clarification on the relationship between Tata Group and the Airbus Group in the C295 contract. “This is not a joint venture. Airbus has signed the contract and has awarded the work to be executed by Tata.”

Video: Airbus C295 aircraft for India. Courtesy: Airbus Group.

While the Indian defence ministry statement was categorical that after completion of the delivery of all 56 C295 aircraft, the subsequent aircraft manufactured in India can be exported to countries, which are cleared by the Government of India.

However, some clarity seems to be required on the export question, as Airbus Defence and Space executive vice president for military aircraft Jean-Brice Dumont repeatedly said his company and Tata Group will focus on executing the present contract for 56 aircraft. He, though, admitted that there was a potential for export of the C295 from India.

“We have to discuss this. The talk of export is premature. The potential is real,” Dumont said, clarifying that the assembly line for C295 in Spain would continue to make the aircraft for both domestic and export market. “This (export potential) is a question for 10 or 12 years later. This is not the decade for this question.”

This opinion was seconded by Remi Maillard. “Our number one priority is to execute the project, deliver the aircraft (56 C295 to the IAF) on time and with quality, and comply with all our commitments (which will include offset).” While the first aircraft will be delivered in two years from now in a fly-away condition, all 56 deliveries would be completed in 10 years.

The project will give a boost to the aerospace ecosystem in India with several Micro, Small and Medium Enterprises (MSMEs) spread across the country being involved in manufacturing of the aircraft parts. The programme will also involve development of specialised infrastructure such as hangars, buildings, aprons and taxiway.

“We have connected with 125 Small and Medium Enterprises for this project in India to create a value chain. The Transfer of Technology has been discussed and well documented,” Sukaran Singh said. The two companies have put in 11 years of partnership in the project to build a strong relationship, he said.

“We will go from the raw materials like Aluminum blocks on one end to a flying aircraft at the other. Tata Group has now gone on to make salt to software to cars to military aircraft. This is perhaps one of the last projects that Ratan Tata had put together in his last year as chairman of Tata Sons,” Sukaran Singh said.

“We will be ready to do equivalent projects in the 10th year of this project.” Which means, Tata Group will emerge as a full-fledged competitor to state-run Hindustan Aeronautics Limited, ending its 70-year monopoly in military aircraft manufacturing in India.

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Categories: Defence, Diplomacy, Indian Air Force, Industry, Modernisation, Procurement, Top News

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