India pitches to become aerospace offshoring base
Wed February 9, 2005 5:04 PM GMT+05:30
By Narayanan Madhavan
BANGALORE (Reuters) - India's state-run aerospace industry aims to take a page out of the IT sector's book by promoting itself as a potential offshoring base for foreign companies, Defence Minister Pranab Mukherjee said on Wednesday.
Joint ventures that take advantage of India's low-cost engineering and science skills can cut development and marketing costs, Mukherjee said at the inauguration of the bi-annual Aero India show in Bangalore.
"There is tremendous scope for outsourcing from India in areas where the companies are competitive," he said. "We are keen to welcome international collaborations that are in conformity with our national goals."
Before India's aerospace industry opened up to foreign companies as part of broader economic reforms in 1991, state-owned Hindustan Aeronautics Ltd. (HAL) and other state agencies had focused for five decades on national defence.
HAL now makes aircraft doors for Airbus, part of Europe's EADS, and is set to produce 44 of the 66 Hawk trainer jets New Delhi is buying from Britain's BAE Systems Plc under a joint programme. BAE also has a software joint venture with HAL.
Mukherjee said India had the capability to make advanced alloys, process technologies and aircraft equipment, and the industry was considering diversifying into making civil aircraft.
While Bangalore is the centre for India's $16 billion IT and business services outsourcing industry, it is also the main centre for aerospace.
Since Indian and U.S. relations have improved in recent years, opportunities have opened up for U.S. companies in India.
Lockheed Martin Corp signed on Wednesday a technical agreement with HAL to share data on its P-3 Orion surveillance aircraft. India is considering buying F-16 fighter jets from Lockheed Martin.
"We are confident that integration of Indian industry such as HAL into our worldwide supplier base will enhance the attractiveness of our products to the government of India," said Dennys Plessas, regional vice-president in Lockheed's aeronautics unit.
On Tuesday, Boeing Co. signed up Indian software firm HCL Technologies Ltd. to develop a hosting platform for the flight test system for its new 787 Dreamliner aircraft.
France's Snecma, set to be taken over by Sagem, said it planned a 50-50 joint venture with HAL to make engine parts, investing an initial 300 million rupees ($7 million).
"Snecma looks at India as a priority for strategic development," the company said in a statement.