Bangalore: When Ashok Baweja, chairman of Hindustan Aeronautics Ltd, or HAL, India’s military plane manufacturer, delivers five Dhruv helicopters to Ecuador at the Aero India 2009 show, commencing in Bangalore on Wednesday, the event will mark a key milestone: the single largest Indian defence export deal to date.
Flying high:Five Dhruvs will be delivered to Ecuador at the Aero Show. Hemant Mishra / Mint
In June, the state-run plane manufacturer won the $51 million (Rs250 crore now) deal from the Latin American nation after at least four years of marketing efforts in the region to hawk an India-grown aerospace product. “Our products are being accepted, you will see more such deals coming to us,” says Baweja.
HAL is supplying three Dhruvs to Turkey as well.
India, the world’s third largest importer of arms, has been largely producing aircraft and helicopters under licence, and has only a few products of its own with global buyers.
One of them is Dhruv, a twin-engine helicopter in the 5.5-tonne class, which can carry 13 passengers. Other exports include radars, bombs, electronic warfare systems and ground handling equipment for aeroplanes made by public sector defence firms such as BEML Ltd, Bharat Electronics Ltd and the Ordnance Factories Board, for supply to countries such as Sri Lanka, Nepal, and South-East Asian and African nations.
In fiscal 2008, India’s exports were less than Rs500 crore, a majority of which were from HAL’s shop floors. Its exports of helicopters and aircraft spares were worth Rs271 crore during the year.
Contrast that with India’s imports of multi-role jets, artillery guns, helicopters and missiles that could reach $30 billion by 2012, according to a study by the Associated Chambers of Commerce and Industry of India, a lobby of trade associations.
This import-export mismatch is expected to change under a new policy that mandates foreign arms and aviation equipment sellers to source from India components and services to the tune of at least 30% of the value of contracts worth at least Rs300 crore. Defence aviation could lead the change, says C.G. Krishnadas Nair, president of the Society of Indian Aerospace Technologies and Industries, an umbrella body of around 300 Indian companies in the aerospace sector.
“Much more can be done and offsets could be the catalyst. But for that to happen, small companies should join together as a consortium or under an umbrella of a large company, be it (the) private or public sector,” says Nair. “Global firms don’t like to deal with multiple small players; going with strength would help India gain more.”