IAF CHIEF: WE ARE AGGRESSIVELY PURSUING OUR ACQUISITIONS Vol VII, Issue V, OCTOBER 2016 n `100
DEFENCE n DIPLOMACY n SECURITY www.geopolitics.in
STRATEGIES
FOR THE FUTURE All plans for the future require basic change in the macro level planning process so that requirements of the IAF are not mere wishlists but grounded in reality
INDIA GEARING UP TO BECOME CHOPPER MANUFACTURING HUB
HAL's Dhruv Advanced Light Helicopter (ALH)
In the past, India has been spending several billions of dollars to purchase military helicopters for its armed forces. It is in the best interest of the Indian industry that it now plans to build helicopters in India and invest in indigenous development work for helicopters. A GEOPOLITICS REPORT
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ndia is rapidly building capabilities to emerge as a preferred destination for manufacturing in the aerospace sector, particularly helicopters. India has skills and competencies in areas that include engineering and production. These capabilities have been recognised and harnessed by foreign companies outsourcing manufacturing work to India. It is estimated that the Light Utility Helicopters market alone for Indian military would be an opportunity worth more than `20,000 crore. If you add another `50,000 crore worth of opportunities in
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the Medium- to Heavy-Lift helicopter category, the helicopter industry alone throws up a `70,000-crore opportunity over the next few years. Between now and 2022, Indian military is expected to need over 1,000 helicopters in the cargo transport, surveillance and attack roles. Of these, the Indian Army is expected to look at acquiring nearly 500 helicopters, the Air Force about 350 helicopters and the Navy another 200 helicopters. Of the Indian military segment requirements, the transport segment is likely to be about 55 per cent, the attack
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and specialised roles would be another 35 per cent and the rest would form the remaining 10 per cent of the demand. It is estimated that the military helicopter requirement in India is growing by seven per cent year-on-year and this trend is likely to only improve over the years. India is expected to spend about $20 billion on just military helicopters till 2022. For this reason alone, the Indian helicopter industry for the military segment is witnessing unprecedented growth and this growth is being driven by stateowned Hindustan Aeronautics Limited (HAL). HAL has played a major role in the
defence aviation sector of India through its capabilities to design, manufacture and overhaul of military aircraft, ranked 34th in the list of world's top 100 defence companies. Further, the government of India had recently opened a series of tender for the Indian private sector only under the Buy and Make (Indian) category of the Defence Procurement Procedure, in a bid to boost indigenous manufacturing of military helicopters. Among these are acquisition of 400 Reconnaissance and Surveillance Helicopters (RSH) for the Indian Air Force and the Indian Army, and procurement of 100 naval utility helicopters. The programmes include the manufacturing of a large number of helicopters apart from creating a supply chain for the helicopter in India and maintenance facility. The total business opportunity from the above two programmes is said to be worth `25,000 crore. That makes it a market worth `95,000 crore ($15 billion) for military helicopters in India. Indian Army has initiated a case for procurement of Reconnaissance and
Surveillance Helicopters (RSH) to replace its helicopters due for de-induction. The Defence Acquisition Council (DAC) has accorded Acceptance of Necessity (AoN) for 200 Kamov 226T helicopters for which an Inter-Governmental Agreement (IGA) has been signed with the Russian Government in December 2015. In the past, India has been spending several billions of dollars to purchase military helicopters for its armed forces. It is in the best interest of the Indian industry that it now plans to build helicopters in India and invest in indigenous development work for helicopters.
PSU can't meet the demand
First, let us take a look at what HAL has done to boost helicopter manufacturing in India. One of those successes that HAL has brought to India is in its Advanced Light Helicopter or Dhruv project. This is the only helicopter made in India that has now seen exports, though there is real scope for improvement of both the helicopter itself and its export potential. No wonder, India, especially HAL, makes
use of every opportunity to showcase the Dhruv helicopters to the world at several air shows and defence exhibitions, including the aerobatics by its now popular 'Sarang' team that flies four Dhruv helicopters at such air shows. The count for users of the Dhruv helicopters goes like this in the Indian context: The IAF has 66 Dhruvs, Army has 78, the Navy has eight and the Coast Guard four. These apart, India has exported the Dhruvs to Ecuador, Afghanistan, Nepal and Maldives. The export potential for Dhruv is immense, considering that it has cleared flights at high altitudes and extreme cold weather at Siachen, apart from other terrains around India. As far as India's indigenous capability to design, develop and produce helicopters, HAL has produced over 330 Chetak and over 245 Cheetah helicopters so far and overhauled over 200 helicopters of both types. Among the other current programme at HAL are the development and production of 187 Light Utility Helicopters, 179 Light Combat Helicopters and 76 Weaponised Utility Helicopter called Rudra.
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Kamov Ka 226 light helicopters that Russia wants to 'Make in India'
Its current capability is to produce 30 helicopters a year, which is not enough to meet the current demand. With HAL currently being the only helicopter manufacturing unit in India, it is going to be difficult for it to meet the over 1,000 helicopters required by India's armed forces in the next 15 years. It could be short by two-thirds of the requirement of over 1,000 helicopters and hence it needs to look at increasing its capability. Currently, HAL has just one helicopter manufacturing facility in Bengaluru. However, it plans to have two more units outside Bengaluru soon. HAL has laid the foundation stone for its second facility at Tumkuru. In January 2016, in a bid to put India on the global defence manufacturing map, Prime Minister Narendra Modi laid the foundation for state-owned Hindustan Aeronautics Limited's `5,000-crore military helicopter production facility at Tumukuru, about 100 km from Karnataka provincial capital Bengaluru. The facility is expected to produce around 600 helicopters over the next 15 years, beginning its production in another two years. The facility would primarily manufacture the Russian-origin Kamov Ka-226T light utility helicopter for which an agreement was signed in December 2015 when Modi was in Moscow for a summit meeting with Russian President Vladimir Putin. The first helicopter built in this unit should take flight by 2018. He said 4,000 families will directly or indirectly get live-
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lihood due to this factory. Companies such as HAL should help the country to reduce dependency on overseas suppliers. The ambitious project can build 600 helicopters in the next 15 years. Under this 'Make in India' project, the facility will have a helicopter flying out of it in the next two years. It will create 1,000s of jobs in the rural area of Karnataka and put this rural town on the aerospace map of India. Of the 2,300 suppliers of HAL, 1,600 are based in Karnataka, accounting for 70 per cent of the supplier base. The state government has transferred 610 acres to HAL at a concession rate of `1 lakh an acre. HAL wanted a four-acre plot of adjacent land, which too would be provided for the helicopter facility. The facility would also get an approach road, while the High Tension power lines passing through this facility would be shifted out. The cost of transfer of the power line and providing alternative power line, worth `54 crore, would also be borne by the state government. The facility would provide direct employment to 1,500 to 2,000 people, and another 2,000 would get indirect employment. With HAL planning to have maintenance infrastructure too for its Light Utility Helicopter, Light Combat Helicopter and a 10-ton cargo helicopter, another 3,000 jobs would be created. Only on December 29, 2015, Hindustan Aeronautics Limited and Russia's Rostec had announced that they will form a joint venture in India soon to manufac-
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ture 200 Kamov Ka-226T light utility helicopters for the Indian armed forces. The joint venture will also explore the possibility of exporting the Kamov helicopter in the future, Rostec State Corporation CEO Sergei Chemezov said. The 200-helicopter is to meet the requirements of the Indian Army and the Air Force, in the ratio of 2:1. That is, the Army would get about 135 of these helicopters, while the Air Force would get 65.
Private Sector can Help
So far, Department of Industrial Policy and Promotion (DIPP) has issued 342 licenses to 205 Indian private companies for manufacturing of defence equipment, which includes helicopters too. As far as the private sector is concerned, the participation in aerospace/helicopter manufacturing segment so far has been only as suppliers, fabricators to HAL and OEMs. Some of the major Indian industries have the intent to obtain the needed technology to take up complex manufacturing of helicopters. However, they have to start as system integrators or recipients of technology in the absence of know-how and build capability. Tata Group has been associated with defence production for the last fifty years. In 2010, Tata Advanced Systems Limited formed a joint venture for manufacture of the Sikorsky S-92 helicopters in India for the domestic civil and military markets. Indian Rotorcraft has made an investment of $30 million in helicopter in-
HAL conducting a technical flight of indigenous Light Utility Helicopter (LUH) in Bengaluru
PM Narendra Modi laying the foundation stone for HAL's New Helicopter Manufacturing Facility at Tumakuru MOD
dustry. Recently, Tata Advanced Systems signed an agreement with Bell Helicopter to develop rotary wing markets, including military, in India such as the Light Utility and Reconnaissance segments. The scope of this agreement is intended to include potential production and assembly capabilities, certain training and maintenance, repair and overhaul requirements, as well as research and development programs and technology sharing that will grow industrial capabilities and result in innovative ‘Make in India’ solutions. Mahindra Aerospace subsidiary of Mahindra Group specialises in production of light aircrafts and aero composites. In 2011, it signed a memorandum of understanding with the then Eurocopter of Airbus Group to manufacture sub-assemblies and other engineering products for the growing helicopter market in India. Recently, the company has teamed up with Bell Helicopter for aerospace and space sector manufacturing. Airbus Helicopters has awarded a contract to Mahindra Aerostructures to make airframe parts for the AS565 MBe Panther. These parts will be produced at the Mahindra facility in Bengaluru. They will be shipped directly to the Airbus Helicopter production line in Marignane, France where they will be integrated with the rest of the airframe assembly and will form a critical part of the Panthers sold worldwide. The contract positions Mahindra Aerostructures as the first Indian company to receive a direct manufacturing
contract from Airbus Helicopters as a Tier-1 supplier. Mahindra Aerostructures will gradually emerge as the global single source supplier to Airbus Helicopters for these parts. This work package is the first amongst a series of work packages which would embed Mahindra Group firmly in the Airbus Helicopters' global supply chain and bind the two companies in a long-term ‘Make in India' partnership. Significant progress has been made by Airbus Helicopters and Mahindra Defence following their Memorandum of Understanding (MoU) last July to form a Joint Venture as a part of the ‘Make in India’ initiative to produce military helicopters in India. Affirming their commitment, representatives of both companies signed a Statement of Intent, in the presence of the Indian Prime Minister Narendra Modi and the visiting French President François Hollande in January this year in Chandigarh. Mahindra Defence and Airbus Helicopters have already initiated industrial relationship to produce helicopter parts locally and are defining additional work packages to be industrialised in India which would facilitate the required rapid ramp-up in the case of a programme award to the joint venture. Simultaneously, both sides are evaluating potential industrial sites and are screening the existing local supply chain, while moving ahead with the setting up of the Joint Venture. Reliance of the junior Ambani brothers has set up Reliance Defence and Aero-
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space (RDA) as a wholly owned subsidiary unit of Reliance Infrastructure. The company is in talks with some of the international companies like former Eurocopter (now Airbus) of France and Sikorsky of the US for technological tie-ups. American aviation giant Boeing has announced that it has plans to assemble either its Chinook heavy-lift helicopters or Apache attack choppers in India even as it gears to offer the possibility of manufacturing a fighter jet aircraft in the country. It has recently won contracts for supplying the two helicopters to India and has offloaded a part of the manufacturing work to Indian private sector companies such as Dynamatic Technologies that make Chinook helicopter's aft pylon and cargo ramp assemblies in India. Boeing recently laid the foundation stone for its joint venture with Tata Advanced Systems Limited for the manufacturing facility for Apache helicopter fuselages and other aerostructures in Hyderabad, which was attended to by Defence Minister Manohar Parrikar, who never lets an opportunity to praise the Boeing effort in fulfilling its commitment on the two helicopters front.
Allied Helicopter Businesses
Helicopter manufacturing requires huge investments from building up infrastructure to manufacturing, assembly, testing, training, and simulation facilities. The opportunities in the helicopter avionics and engines are also likely to increase manifold providing lucrative opportu-
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Boeing defence platforms: Always Mission Ready for India he past year has been a very successTSecurity ful year for Boeing Defence, Space & (BDS) in India. Boeing has been
time reconnaissance missions by the Indian The tandem rotor H-47 Chinook is the Navy, including performing aerial reconnaismost capable, advanced heavy lift helicopter sance and gathering data for planning relief in the world, providing maximum value at the establishing the building blocks efforts. lowest risk. The H-47 Chinook offers India for a long term defence presence This has been possible due to heavy-lift and high-altitude transportation for in India. We are beginning to see continuing to put our customers’ a multitude of military, humanitarian, rescue, those early efforts bear results – requirements first. Our customers disaster relief, fire-fighting and nation-buildwith 10 C-17 Globemaster strategic in India need cutting-edge technoling missions in all climates and conditions airlifters and eight P-8I maritime ogy and capabilities, but we have to and altitudes. The aircraft is ideally suited for surveillance and anti-submarime deliver them with affordable support India’s vast distances, austere environments warfare aircraft delivered, Boeing is and training to meet their demandand high altitudes. partnering with the armed forces on ing mission needs. Making in India mission-readiness and its moderniIn September last year, India’s Michael Koch Significant portions of the Apache and Chisation effort. The Indian Air Force’s Ministry of Defence finalised its nook helicopters will be made in India for all C-17s have played a stellar role in order with Boeing for production, worldwide customers. Dynamatic Technolonumerous relief and rescue missions and Ptraining and support of 22 AH-64E Apache gies manufactures the ramp and pylon for 8Is have enabled the Indian Navy to monitor attack helicopters and 15 CH-47F Chinook the CH-47 Chinook helicopter in India. Boeing India’s vast coastline. heavy-lift helicopters. The Apache and Chialso announced a joint venture with Tata AdThe recent contracts of 22 AH-64E nook represent the best of high-performing vanced Systems Limited (TASL) in November Apache attack helicopters and 15 CH-47F technologies that will modernise India’s last year to manufacture aerostructures for Chinook heavy-lift helicopters further defence capabilities and will greatly enhance aircraft. Based in Hyderabad, the joint venstrengthens our position as a long-term the country’s capabilities across a range of ture TATA Boeing Aerospace Limited (TBAL) strategic partner for India’s defence modmilitary and humanitarian missions. India will will eventually be the sole producer of AH-64 ernisation. Boeing will also continue to work start receiving the helicopters in 2019. Both fuselages globally. The Apache has been closely with our customers to ensure they are the newest models of those aircraft. flown or selected for acquisition by the receive the helicopters on time United States and 15 other nations, and have the required support and including India. training to operate them. Boeing has been working with Presently, the Indian Air Force suppliers in India for over two decades has 10 C-17 Globemaster III stratein manufacturing, IT and engineergic airlifter aircraft which Boeing ing services. Today, there are more delivered on schedule in 2013 than 30 suppliers providing parts and and 2014. With the 10 deliveries, assemblies covering commodities Boeing met its commitment of such as aerostructures, wire harness, completing the contract signed composites, forgings, avionics misin June 2011, making India the sion systems, and ground support largest international operator of equipment. Since 2008, Boeing’s the C-17. Boeing also delivered all engagement with suppliers has eight P-8I maritime surveillance increased substantially for commercial and anti-submarine aircraft to the and defence aircraft such as the 777, Indian Navy by the end of 2015. 787, P-8, F/A-18, F-15, and CH-47 Both aircraft have demonstrated Chinook. Some of the work our Indian an excellent record in supportpartners are delivering for Boeing is ing the missions they have been Defense Minister Manohar Parrikar breaks ground of Boeing-Tata Joint indicative of the complex manufacturdeployed for, and our customers Venture that will produce Apache fuselages in Hyderabad ing capabilities that Indian companies have expressed satisfaction about are capable of developing for the global the operational readiness of their market. fleets. The Apache is the most capable multiIndia is one of the most important Both aircraft were at the forefront of role combat helicopter, combining performarkets for Boeing internationally. Boerescue and humanitarian aid efforts in the mance and lethality with more affordable ing’s defence trade with India constitutes natural disasters that affected several Indian and efficient maintenance. It will provide three-quarters of overall defence trade by states in the past two years. The C-17 was the Indian Air Force with enhanced dominant US companies in India with the sale of C-17 deployed to evacuate people and deliver relief force projection capabilities and will address Globemaster III strategic airlifters to the supplies in these important relief missions. the full spectrum of conflict to peacekeeping Indian Air Force, P-8I long range maritime The P-8I has been used extensively in mariand nation building.
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reconnaissance and anti-submarine warfare aircraft, Harpoon missiles to the Indian Air Force and Indian Navy, services contracts as well as sourcing partnerships with Indian firms.
F/A-18 Super Hornets India Production Line Expected to Transform India’s Aerospace Ecosystem Boeing has had a presence in India for more than seven decades and is committed to expanding that partnership by producing Super Hornets in India, further developing India’s aerospace ecosystem. The Super Hornets will be built in India in a world class advanced manufacturing facility with the very latest technologies in place, perfectly positioning India to build its Advanced Medium Combat Aircraft (AMCA). With advanced technologies, designed in stealth and a robust capability growth plan, the Super Hornet offers advanced multirole attack fighter capability and is perfectly suited to meet the needs of the IAF now and for many decades to come. The Super Hornet does not only have a low acquisition cost, but it costs less per flight hour to operate than any other tactical aircraft in US forces inventory.
Future Opportunities for Boeing Defence in India Boeing also sees future opportunities for providing additional P-8I long range maritime reconnaissance and anti-submarine warfare aircraft, AH-64 Apache attack helicopters, CH-47F Chinook heavy-lift helicopters, aircraft refuelling tankers and weapons such as Harpoon missiles, unmanned systems and services and support. Boeing’s business strategy has a dual focus in India – firstly, to provide a winning platform to our military customers, with state-of-the-art, reliable, and fuel-efficient products, underscored by life-cycle support services; and secondly, to create an ecosystem for the aerospace industry in India, through partnerships with local companies. Going forward, you will see Boeing deepening its presence in India and continue to strengthen its partnerships with Indian companies to align with the government’s Make in India vision.
— Michael Koch, Vice President, Boeing Defence, Space & Security India
HAL and Safran Helicopter Engines during the agreement signing for establishing a helicopter engine MRO support centre in India
nity to domestic companies to venture into this segment, by either opening up a manufacturing facility for these products on its own or by opting for the Joint Venture route with foreign companies. India has over 1,500 units of engine requirements in the coming years. HAL and Safran Helicopter Engines have agreed to establish a support centre in India for national and international rotorcraft customers. An agreement to this effect was signed in July 2016. This new centre will provide Maintenance Repair and Overhaul (MRO) services for Safran TM333 and HAL Shakti engines that powers HAL-built helicopters. Safran Helicopter Engines and HAL will provide their customers with a firstclass service including optimised engine availability. With over 1,000 engines, including 250 TM333 and 250 Shakti, India's armed forces are one of the largest operators of Safran-designed helicopter engines. Shakti is the Indian designation for the Safran's Ardiden 1, co-developed with HAL and produced under license. The joint venture will provide the impetus for the ‘Make in India’ initiative since around 1,000 Shakti engines are likely to fly in the coming years. Shakti is fitted to HAL's Dhruv and has been selected to power the HAL-designed Light Combat Helicopter (LCH). The new Light Utility Helicopter (LUH), a three-ton single-engine chopper under development is also fitted with a Turbomeca engine. Glass cockpits with multi-functional
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displays are in huge demand. HAL and IAI have jointly developed glass cockpit for HAL Dhruv helicopter. Avionics suites consisting of High Frequency and Ultra High Frequency communications radio, identification of friend and foe systems, Doppler navigation, and a radio altimeter; a weather radar, navigation radars, and also avionics for day-and-night flight observation are also in huge demand. Samtel and Thales have formed a joint venture in 2010 for production of helmet mounted sight and display and other avionics systems in India. Similar opportunities existing in electronic warfare systems, optronics and targeting systems, weapon and missiles, aero composites, and MRO sectors too. Swedish Saab's compact integrated defensive aids suite has been selected by HAL for its Dhruv, Rudra and LCH. Saab has signed a memorandum of understanding with HAL in 2011 to form a joint venture for airborne electronic warfare systems. Bharat Electronics and Elbit System are working on airborne electronic warfare programmes for Indian requirements. It will be an understatement to say that the opportunities in the military helicopter segment in India is booming. There exists a gap in the demand and supply and that can be filled up only by the private sector. For India to meet its potential, the government should encourage foreign players to tie-up with Indian private sector for better meeting the gap in the supplies of helicopter and its allied parts, components and spares.
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