Airbus to scale up defence production with Tata arm

In 2021, IAF signed an agreement with Airbus for 56 C295 military transport aircraft for  ₹21,395 crore.
In 2021, IAF signed an agreement with Airbus for 56 C295 military transport aircraft for 21,395 crore.

Summary

  • Initially, it will focus on sourcing components like metallic and composite manufacturing tech

Airbus S.A.S. is planning to enhance its partnership with Tata Advanced Systems to broaden India’s defence supply chain, as well as launch new products to cater to the country’s defence needs, Jorge Tamarit-Degenhardt, who heads the C295 transport aircraft programme for Airbus, said in an interview.

According to Tamarit, Airbus and Tata will invest in developing capabilities, including acquiring raw material and manufacturing detailed parts, or subcomponents, as well as establishing sub-assembly and assembly facilities. The programme will be in phases, with an initial focus on sourcing components such as metallic and composite manufacturing technologies, he added.

“We work with Tata and we train Tata. Then, it’s up to them to decide whether they make or buy the components. Whenever they are selecting a supplier or MSME (micro, small, and medium enterprises), they need to satisfy some requirements which have been set up by Airbus. So, we are doing the assessment of the suppliers. We are qualifying them and whenever there is a gap, supporting them. In the first stage, most resourcing will be metallic and composite manufacturing technologies." The firm will also prioritize electric harnesses in its efforts to strengthen India’s supply chain, he said without providing details of the investments. It aims to fulfil the demand for military transport aircraft as India works towards replacing its aging military transport fleet.

In 2021, the Indian Air Force had signed an agreement with Airbus for 56 C295 military transport aircraft, for 21,395 crore. Around 16 of these aircraft will be acquired in a ready-to-fly condition from the final assembly line at San Pablo Sur site in Seville, Spain. The first aircraft was handed over by Airbus earlier this year in the presence of Air Chief Marshal Vivek Ram Chaudhuri. Around 40 C295s will be manufactured locally requiring investments from both Airbus and Tata Advanced Systems to establish the defence supply chain.

According to Tamarit, Airbus aims to leverage this supply chain not only for additional transport aircraft but also for other defence platforms and offerings, given that the Indian military requires an estimated 100 aircraft. Airbus and Tata expect to deliver the first India-manufactured C295 in 2026 from their final assembly line in Vadodara, which will be operational by November 2024.

Component production for the aircraft has started at the main constituent assembly facility in Hyderabad, Airbus said. Other foreign defence firms, such as Brazil’s aviation major Embraer, are also exploring establishing manufacturing facilities in India. Mint earlier reported that Embraer is in talks with the Tatas and Hindustan Aeronautics Ltd to manufacture defence transport aircraft in India.

Following the Centre’s push to encourage global defence companies to “Make in India", there’s a concerted effort to establish a robust domestic defence supply chain. New Delhi’s initiatives include releasing indigenization lists, boosting domestic procurement in Defence Acquisition Procedure 2020, and promoting defence industrial corridors. These measures aim to facilitate the entry of foreign firms into the Indian market, support defence startups, and boost research within the country. “Airbus and Tata partnering is an example of two giants coming together and building synergies to come up with something remarkable and much needed for economic growth. Such partnerships are bringing in capital from the global market and immense global experience and in turn getting access to skilled manpower, market, local trust of capability and delivery and a brand which has been synonymous of delivering business for the greater good," said Brajesh Singh, president, Arthur D. Little India.

Tata Advanced Systems Limited did not comment on the matter.

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
more

MINT SPECIALS

Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie