Monday 22 July 2019, 06:39 AM
Boeing bullish on India as manufacturing base
By IANS | Bharat Defence Kavach | Publish Date: 9/14/2016 12:00:00 AM

India is currently finalizing negotiations to buy 36 French Rafale multi-role fighter jets -- a deal for which Boeing unsuccessfully pitched its F/A-18 Super Hornet. But Boeing India president Pratyush Kumar is looking to life beyond the Rafale deal, and to India's growing role in the company's global operations.

"In India we have a robust and growing business partnership in both the commercial and defense space," Kumar said. "Just this past month, the Indian government placed an order for four P8-I maritime reconnaissance aircraft." That deal is worth more than $1 billion.The company also announced the start of construction in Hyderabad of a joint venture aerospace factory with Tata Advanced Systems, part of the Tata Group, in June.

"This factory will make the entire fuselage for the Apache attack helicopter. This is not just for the 22 Apaches that India has contracted for -- but also for the global supply chain of Boeing. This is just the beginning; we see India as a part of Boeing's global aviation ecosystem in the years ahead."

The joint venture will manufacture the Apache's fuselage, door frames for the P8-I and will also scale up for Boeing's global needs. Tata will benefit from technology transfer through the joint venture.Kumar is also bullish on combat aircraft, despite the Rafale deal. "The [Indian Air Force] will gradually phase out the Mig-21, Mirage 2000 and Jaguar squadrons over the next decade. This creates an opportunity for more aircraft for the IAF," he said.

"India will look beyond the India-made light combat aircraft and the French Rafale. Boeing is willing to create an aircraft ecosystem by transferring the entire production line of the Super Hornet [F/A-18] to India."Present in India for 77 years, Boeing is the largest single defense vendor to the country, where it has an estimated $11 billion order book. This is a sea change from just a few years ago, when Russian and Israeli companies dominated Indian defense imports.

Zero defect domain


Kumar attributes the opportunity for sourcing globally from India to the available pool of engineering talent. However, for India to best leverage the global opportunity, government rules requiring 30% to 50% of each contract to be made in India -- depending on the contract size -- need to be made more flexible, he said.

"Capacity building is critical in aviation, which is a different kind of business from, say, the automotive industry," he said. Aviation "is a zero defect domain. Aviation needs an ecosystem to be put into place. India should consider using offset dollars in skill development to create a new generation of aeronautical engineers."

In its recently released market outlook for 2016, Boeing said it expects the Indian commercial aviation market to grow significantly in the medium term. It projects demand at 1,850 new aircraft, valued at $265 billion, by 2035. Of these, the company believes 1,500 aircraft will be single-aisle, while 280 will be wide-bodied.

According to the International Air Transport Association, air travel in India grew by 20% in 2015 -- the fastest growth rate in the world.However, some analysts believe that Indian skies may be becoming over crowded as the number of competing airlines continues to soar -- the latest to enter the market include Vistara, a joint venture launched by Tata and Singapore Airlines, and Air Asia India, an offshoot of Malaysia's Air Asia. Boeing recently announced that Jet Airways, India's second-largest airline by passenger numbers, has put on hold the delivery of 10 Boeing 787 aircraft.

The country's new civil aviation policy, introduced earlier this year, mandates that a one-hour flight anywhere in India must cost no more than 2,500 rupees ($36) compared with a typical previous cost of about 4,500 rupees. The policy also frees airlines from rules requiring them to have been in business for at least five years and to possess a fleet of 20 aircraft before they can fly abroad.

"The new civil aviation policy will sustain aviation momentum going forward. The reform will spur cheaper regional connectivity. This will expand the Indian civil aviation market spatially -- beyond India's key mega cities," Kumar said. Boeing plans to pitch the 737-8 MAX, its prime regional jet, for the Indian market.

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Boeing bullish on India as manufacturing base

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