PARIS 2009: HAL needs to closely watch Tata-Sikorsky deal

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As Hindustan Aeronautics officials arrive for the Paris Air Show 2009 this week for the air show, they will have last Friday’s deal between Tata and Sikorsky to manufacture S-92 (above) cabins in India at the back of their minds.

Tata wants to move into India’s aerospace industry and has deals with several Western manufacturers, including Boeing and AgustaWestland. Industry sources say that it is keen to expand its manufacturing base and begin full-scale aircraft assembly and production in the civil and military markets. This would put it in direct competition with state-owned HAL, which is now the only Indian company with the capabilities.

India’s burgeoning aerospace market and the country’s plans to open up the defence sector to private sector players has given the likes of Tata a chance to make a mark. If they are successful, it could radically change the country’s manufacturing landscape.

But this could be an opportunity for HAL as well. Ashok Nayak, who became its new chairman and managing director in April, could use this as a reason to ring in the changes that the company needs to make to become more nimble and less bureaucratic. This is essential as it faces up to competition from the likes of Tata.

If it succeeds, India will likely have a truly competitive and world class aerospace industry. If it does not, HAL risks falling behind the upstarts over the long term.

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