Mumbai/Bangalore: Sikorsky Aircraft Corp., the helicopter unit of US defence contractor United Technologies Corp., and the Tata group’s defence unit Tata Advanced Systems Ltd on Thursday announced a joint venture (JV) to make components and structures for global aerospace companies.
Neither firm would disclose investment details.
Sikorsky will be a minority shareholder in the JV, said Mick Maurer, senior vice-president of operations at the firm.
The two firms already have a pact to make cabins for Sikorsky’s S-92 helicopters at a unit in Hyderabad, the first large aircraft making unit outside the public sector.
This is the first JV to be set up following a 1 November amendment to the defence procurement procedure, or DPP, which allows Indian private firms to form joint ventures or alliances for co-production with a foreign vendor and bid for domestic defence contracts. The amendment requires the JV to make at least 50% of the equipment locally.
The venture will build components and systems for global aerospace firms looking to lower costs.
It will also meet demand for delivering so-called offsets for foreign arms makers who sell equipment to India’s Armed Forces.
India’s offset policy requires foreign manufactures to source 30% of all defence import deals worth more than Rs.300 crore from local firms.
The venture will begin production by 2012 and also supply components for the S-92 helicopter cabins.
“Sikorsky’s affiliation with Tata both strengthens our supply chain and extends our globalization effort to establish significant operations in regions where the need for rotorcraft and support is great,” Maurer said in a statement. Sikorsky is independently seeking to supply 22 attack helicopters to the Indian Air Force.
Despite being a major market for military and passenger planes, India’s domestic aerospace industry only has a handful of firms that cater to military and civilian users.
The state-run military plane maker Hindustan Aeronautics Ltd makes foreign fighters under licence and has to its credit a few aircraft such as the Dhruv advanced light helicopter.
Taneja Aerospace and Aviation Ltd, which has a unit in Hosur in Tamil Nadu, makes small sports planes under licence for exports.
India will import arms, including fighter planes and helicopters, worth at least $30 billion, or Rs1.39 trillion, by 2012, according to the Associated Chambers of Commerce and Industry of India, or Assocham, a lobby of trade associations.
One-third of this is expected to be spent in India by foreign firms under the 2005 offsets policy.
This has attracted other players too.
Quality Engineering and Software Technologies Pvt. Ltd, or QUEST, an engineering services firm, will on Saturday open an aerospace special economic zone in Belgaum in the southern state of Karnataka, which will build components and systems for firms such as Boeing Co. and European Aeronautic Defence and Space Co., or EADS.
On Thursday, EADS’ passenger plane maker, Airbus SAS, India’s Airspace Infrastructure Pvt. Ltd and Turkey’s Air Logic Ltd Sti formed a new spares and logistics support JV called Spares Support Solutions Ltd that will maintain an inventory of components for Airbus’ commercial aircraft in India.