Indigenous manufacturing ready to raise the bar of value addition in defence and aviation

Between 2018 and 2022, India has been the world’s largest arms importer, according to the Stockholm International Peace Research Institute’s (SIPRI) Trends in International Arms Transfers 2022 report. SIPRI is an independent international research institute focussed on conflict, armaments, arms control and disarmament. India is ahead of Saudi Arabia, Qatar, Australia and China, in that order. The United States, Russia, France, China and Germany have been the five largest arms exporters. India accounts for 11 percent of global arms imports, with Russia (45 percent), France (29 percent) and the US (11 percent) being the main suppliers.

It’s against this backdrop that the government’s decision to make defence and aerospace a focus area, as part of the larger Self-Reliant India (Aatmanirbhar Bharat) initiative, assumes significance. The plan is to encourage indigenous manufacturing and along with it the required research and development.

The targets are ambitious: Hit a turnover of $25 billion from aerospace and defence goods and services by 2025, with exports accounting for $5 billion, or roughly ₹41,000 crore. Defence exports stood at nearly ₹16,000 crore in FY23, as per government data, an all-time high.  

Traditionally, the big investors in India included global giants like Airbus, BAE Systems, Lockheed Martin, Boeing and Rafael; the public sector players relied on them for procuring strategic equipment and materials. Defence was opened up to the private sector in the early 2000s, but it’s only of late that a clutch of players—traditional and startups—has begun raising the bar of value addition.  

This fortnight’s issue of Forbes India is focussed on how a heightened mix of activity by public sector, private sector, multinational players and startups is resulting in frenetic activity in defence and aerospace.

The cover story is on a lesser-known, newer company from the Tata fold—Tata Advanced Systems Ltd (TASL), which is spearheading the group’s aerospace and manufacturing play. The 16-year-old TASL, which started by making aerospace components for Sikorsky aircraft and assembling Sikorsky S-92 helicopter cabins, is now aiming to become India’s first private manufacturer of military aircraft. As Manu Balachandran writes, TASL in partnership with Airbus will make 40 Airbus C295, a new-generation tactical airlifter meant to replace the twin-turboprop aircraft that’s been in service with the Indian Air Force since the 1960s. 

On the MNC front, GE Aviation, soon to become GE Aerospace (and independent from the parent), is ramping up on the commercial airlines front as engine supplier as well as in defence. For the latter, as Harichandan Arakali writes, GE engines could well find their way into India’s second-generation light combat aircraft being made by Hindustan Aeronautics Ltd (HAL). 

The state-owned HAL itself is a remarkable story of transformation and turnaround. India’s oldest aircraft maker is now set to break new ground by manufacturing a range of indigenous products—from the Tejas fighter aircraft to four different types of helicopters.

Equally fascinating are the advancements in the startup space. The 2015-founded drone-tech venture Garuda Aerospace is poised to develop advanced precision drones in partnership with an HAL subsidiary. Garuda will, as Naini Thaker writes, also partner Lockheed Martin Canada CDL Systems and the Tamil Nadu government for software solutions in advanced uncrewed aerial systems. For more on those alliances, turn to ‘Spreading Wings’.