2 min read.Updated: 15 Mar 2016, 01:24 AM ISTP.R. Sanjai
Group CEO says if they clinch the Naval Utility Helicopters contract, they will build final assembly lines in India
Europe’s Airbus Group which is competing for aircraft orders from India’s navy and air force Monday said it will build local assembly lines if these projects come through.
The final assembly lines to make Panther helicopters for the Navy and C295 transport aircraft for the Indian Air Force will be built at a cost of over ₹ 5,000 crore and will create over 10,000 high skilled jobs, the aerospace and defence firm said in New Delhi.
“We are proposing to establish a final assembly line in India for the AS565 MBe Panther helicopters, if we get the Naval Utility Helicopters contract," said Pierre de Bausset, president and managing director, Airbus Group India. “We will have India as the global hub for Panthers," he added.
He said along with the final assembly line, Airbus will set up tier I, II and III supply chain infrastructure in India for these helicopters.
Airbus Helicopters is in the process to form a joint venture company with Mahindra Defence Systems Ltd. This company hopes to become the private strategic partner on helicopter platforms.
On 24 January, the defence production arm of the Mahindra Group, Mahindra Defence and Airbus Helicopters had signed a so-called statement of intent to produce military helicopters in India.
The companies plan to set up a final assembly line in India, develop tier-1 and tier-2 suppliers and make extensive transfer of technology, to achieve 50% indigenous content.
In July, Mahindra Defence and Airbus Helicopters had signed an in-principle agreement to set up a joint venture to manufacture helicopters in India, seeking to tap a military hardware market estimated to grow to $41 billion in seven years.
Apart from the Naval Utility Helicopters, the joint company will also target the Reconnaissance & Surveillance Helicopters (RSH) requirement of over 200 units with the H125M Fennec and the Naval Multi-Role Helicopters (NMRH) requirement of more than 120 units with the H225M (previously marketed as EC725).
The company also plans to establish a final assembly line in India for the C295 military transport aircraft in partnership with Tata Group companies.
The C295 is being proposed as a replacement for the Indian Air Force’s ageing Avro fleet.
The company said the selection process is on track and field evaluation trials are expected in the near future.
The Make In India initiative launched by Prime Minister Narendra Modi on 25 September 2014 aims to boost domestic manufacturing and create jobs. Twenty-five sectors were identified for Make In India, from automobiles to aviation to pharmaceuticals to tourism and wellness.
Stressing that the Group is already making in India through its over 45 suppliers, de Bausset said, “What we buy in India, we make in India."
Referring to the Indian government rules restricting foreign ownership in the Indian defence sector to 49%, de Bausset said: “The issue is not the limit per se. The business case for high-tech transfer to India becomes more compelling if foreign OEMs (original equipment manufacturers) are allowed to have adequate equity and management control in the joint venture in line with the risks they are taking and the contributions they are providing."
In a first for any foreign aerospace and defence OEM in India, Airbus Group exceeded the $500 million annual procurement mark from India in 2015, Mint reported on 12 March.
Airbus Group has now set its sight on exceeding $2 billion in cumulative procurement, covering both civil and defence, in the five years up to 2020, Mint reported citing de Bausset.