For all its ambitions to be an aviation powerhouse in its own right, India’s fledgling aerospace sector has some way to go.
Does the Indian aerospace sector suffer from a “perception problem”?
For GMR Aero Technic chief Ashok Gopinath, he believes that to be the case. Speaking at an MRO panel during the recent CAPA India Aviation Summit, Gopinath contends that some manufacturers and lessors “are still sitting on” perceptions of the country “from 15 or 18 years ago”.
Gopinath, who stresses that “there is a lot of change now in the country”, says a “concerted effort” must be made to “create a positive image” of Indian aerospace, in order for the country’s aerospace sector to come into its own.
This must involve both the government and the aerospace companies, he adds.
As India’s airline sector heads to an “inflection point” – as a government minister puts it – of immense growth, its aerospace industry is hoping to ride the wave and similarly grow in scale.
There have been positive developments of late: GMR signed an agreement with Boeing for work on freighter conversions in February, a crucial fillip to the country’s ‘Made in India’ policy. The move comes amid predictions of a growing cargo market: Boeing estimates issued in February show the new and converted freighter market in India to grow from 15 today to 80 aircraft by 2041.
Civil aviation minister Jyotiraditya Scindia says “the time is now right” for the country to look deeply at manufacturing aerospace products in India.
“The ecosystem has been set up, we already have many international companies that are manufacturing in India, some components, some many more ambitious, dreams of aircraft,” he notes, citing an “ambitious” in-development joint-venture between Airbus and the Tata Group to manufacture C295 tactical transport aircraft within the country.
The production facility, to be housed in the state of Gujarat, is expected to be ready by 2025.
CHALLENGES FACING THE SECTOR
Yet, for all its ambitions to be an aerospace powerhouse, there are several obstacles in its way. The MRO sector, for example, lamented “missed opportunities” in the recent past, as “unfair” tax structures lead to Indian carriers sending heavy maintenance work overseas.
India civil aviation secretary Rajiv Bansal, who also spoke at the summit, sums it up best: “We don’t have MROs of scale anymore.”
Bansal, who formerly headed Air India before returning to the civil aviation ministry, adds: “It takes weeks and months to ship out an engine to an MRO and get it back. International supply chains are disrupted…the air freight charges, [and] the sea freight charges are unbelievably high.”
“We need to have an MRO of scale: component MRO, an engine MRO and airframe MRO of scale and size in India. Otherwise, we talk…of numbers of acquisition of [aircraft]…it cannot sustain unless we have large MROs everywhere.”
India has several major MRO players, most of them privately-owned including GMR and Air Works. Air India Engineering Services (AIESL) remains government-owned but Bansal says Delhi will be divesting its ownership soon.
The panel at the CAPA India summit also contends that the MRO sector lacks engineering expertise in areas like engine and component maintenance.
Gopinath points out that for Indian MROs to fully tap these opportunities of engine and component MROs, they would have to “target the global market”, not just the domestic market.
He suggests greater collaboration and partnerships between MRO operators – not just within India, but also with foreign aerospace companies.
AIESL chief Sharad Agarwal notes that while India has “about 50 schools churning out aerospace students every year”, they are mainly trained in the area of airframe maintenance.
He, together with other panellists, have called on a shift in syllabus towards other areas of MRO, especially in engines and components, which will help broaden the talent pipeline in the country.
Even as they call on more support from the government towards the aerospace sector, the panellists acknowledge there have been some steps in the right direction.
Tax rates, for example, are set to come down in various states across the country, a move Delhi hopes will sweeten the deal for MRO work to be kept in India.
The civil aviation ministry has also tweaked land leasing policies, increasing the land allotment period up from 3-5 years, to 30 years. Lease rates will also be decided through open bidding, as opposed to predetermined rates by state-owned operator Airports Authority of India.