Indian conglomerate Tata Group is closer to becoming a major player in the country's aerospace business after formally seeking approval to set up a manufacturing facility on the outskirts of Hyderabad, capital of the country's southern Andhra Pradesh state.

The 20Ha (50 acre) facility will anchor a proposed 100Ha special economic zone dedicated to the aerospace industry, said Andhra Pradesh chief minister Y S Rajasekhara Reddy at the show. India has been promoting the zones to boost the country's manufacturing base, with the companies that invest in them given tax breaks and other incentives.

Tata Advanced Systems, a division within the Tata Group, will lead the project. Reddy said that it should invest around Rp80 billion ($2.1 billion) in the proposed facility. Tata declined to comment, but industry sources say that senior company officials are responsible for the project and a formal announcement could be made by early 2009.

Tata, one of India's oldest and most famous business houses, has wide-ranging interests including car manufacturing, steel production and IT services. The company helped set up national carrier Air India and chairman, Ratan Tata, is an aviation buff and pilot.

Last year, Tata officials said the company was keen to increase its involvement in the booming Indian aerospace industry. Since then, Tata has signed deals with several Western companies, including one to manufacture components for Boeing and another to produce helicopter cabins for Sikorsky.

However, industry sources say that the company is keen to move into full-scale aircraft assembly and production in both the civil and military markets. This would put it in direct competition with state-owned Hindustan Aeronautics, which is now the only Indian company with the facilities to produce aircraft.

Source: Flight International