Tuesday, February 13, 2007

Indian aerospace and IT majors saw a flurry of activity as global majors scouted for outsourcing aerospace and defense products. Aviation analysts feel that engineering and design services being outsourced to India are emerging the main opportunities. These include control system design, embedded development, high level aeronautical system design, simulation, testing devices, cockpit equipment support software, air traffic management systems, and composite structuring.
Reaping the windfall is a wide gamut of homegrown aerospace and IT majors—Hindustan Aeronautics Ltd (HAL), Larsen and Toubro (L&T), TCS, Wipro, Infosys and HCL.
Indian advantage is obvious to those re-evaluating their engineering and business processes. A recent report by Research & Consultancy Outsourcing Services (RNCOS) predicts that the Indian aerospace technology outsourcing market, which is currently at $155 million, will reach $1 billion by 2009. And by 2020, India’s offshore engineering services market could go up $3 billion, according to Booz Allen Hamilton analysis.
Not surprising then that aerospace majors like Lockheed Martin, Boeing, Thales, Pratt & Whitney, Bombardier, Rolls Royce, among others, flocked here, hoping for a piece of the billions of dollars in defence contracts India plans to spend in modernising its armed forces.
Clearly, the buzz in defence sector revolves around the $10 billion contract for 126 fighter aircraft. On the civil aviation front too, the excitement is palpable as India’s aviation industry is likely to buy aircraft worth $75 billion during the next ten years during which the number of aircrafts would increase from the present level of 250 to 1,500 aircraft.
And to ensure that Indian companies gain from the opportunity, the government has made it mandatory for aircraft manufacturers to source 30% of the value of the aircraft from Indian vendors.
Action is hotting up. The $30 billion Northrop Grumman Corp has joined hands with Satyam Computer Services to jointly provide high-end engineering services to the global aerospace and defence industry. HCL Technologies and Crane Aerospace & Electronics inked a deal under which HCL will provide engineering services to support Crane’s product lines in cabin, landing systems, sensing and utility systems and fluid management across several aircraft programs. HCL Technologies is already working on the flight test system of the Dream liner aircraft from Boeing.
On its part, the US aircraft maker roped in HAL as partner for joint exploration of business opportunities in India’s defence sector. The European major in aerospace, defence and related services, EADS, signed an agreement with HAL for long-term cooperation.
After signing an agreement with Indian Airlines to set up an engineering maintenance facility in New Delhi, French technology major Safran is now looking at investing 50 million euros in a ‘smart card’ manufacturing centre here. Thales, an international electronics and systems group, signed an agreement with Rudradev Aviation (P) Ltd to supply training equipment for Airbus and Boeing aircraft in a contract valued at approximately $60 million.
12/02/07 Atreyee Dev Roy/Financial Express


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