NEW DELHI - India could soon have a domestic competitor to state-owned Hindustan Aeronautics Limited (HAL), if several private-sector defense companies form a consortium to bid for the Air Force's Medium Transport Aircraft (MTA) program.
The Air Force supports such a move because it would give the service more than one local military aircraft supplier and bring healthy competition to the market, one Air Force official said.
The service is slated to invite bids this year on the expected $2.2 billion MTA program, Defence Ministry sources said.
Among the companies discussing a potential group bid are Godrej and Larsen & Toubro, both of Mumbai; and Mahindra Defence Systems and Tata Power SED, based here.
There is broad agreement that the consortium should include three to five major Indian companies, which would lead a group of foreign and domestic subcontractors, said one executive with the Federation of Indian Chambers of Commerce and Industries (FICCI), an industry lobby group.
Despite broad agreement, the firms seem to be stuck on the question of a lead contractor, the FICCI executive said, with Tata Power SED and Larsen & Toubro appearing to be the favorites.
The executive said a group of three to five major Indian companies can handle the job.
The consortium could be created on the lines of the Chinese ARJ-21 project, which has about 58 overseas and domestic private-sector vendors supplying various parts, said an executive of another industry lobby group, The Associated Chambers of Commerce and Industry of India.
One Air Force official said private companies already supply equipment and material to HAL-led efforts to build and upgrade aircraft and helicopters.
Aero structures, simulation material, avionics, metals and composites, and system engineering support have been supplied by domestic private-sector defense companies, including Larsen & Toubro, Tata Consultancy Service, Godrej, HCL Technologies and Tata Power SED, the Air Force official said.
The service's Russian-origin Antonov An-32 transport aircraft are already being upgraded.
HAL, which has annual sales of $3 billion, has its hands full. Outstanding orders include the Russian-licensed production of Su-30MKI; BAE Systems Hawk 100; the Indo-Russian fifth-generation fighter aircraft program; an upgrade of 51 aging French Mirage aircraft; and production of a variety of helicopters for the Indian defense forces.
The MTA program eyed by the proposed consortium is in addition to the finalized MTA deal with Russia.
The joint Indo-Russian deal is targeted to have an initial market of 200 MTAs, with Russia buying 100, India 45 and the remaining 60 earmarked for exports.
A 50-50 joint venture of Russia's United Aircraft Corp. and Rosoboronexport have agreed to participate with HAL on an equity-sharing basis to build the 15-ton MTA.
There are about 100 medium-lift An-32 aircraft and about 30 heavy-lift Il-76 aircraft in the Air Force's fleet.
India has already contracted purchase of C-17 heavy-lift aircraft and the C-130J Hercules from the U.S., and repeat orders are planned to augment the cargo aircraft force.
Last month, Ukrainian company Antonov handed India five updated An-32 transports, the first batch in a 105-aircraft upgrade deal.
India inked a $400 million contract with Ukraine in 2009 to upgrade the An-32 aircraft.
"India needs a competitor to HAL, especially a private-sector consortium, so that the Indian defense forces are able to get aircraft and helicopters on time and integrated with superior and advanced technologies and systems," analyst Nitin Mehta said
The Air Force supports such a move because it would give the service more than one local military aircraft supplier and bring healthy competition to the market, one Air Force official said.
The service is slated to invite bids this year on the expected $2.2 billion MTA program, Defence Ministry sources said.
Among the companies discussing a potential group bid are Godrej and Larsen & Toubro, both of Mumbai; and Mahindra Defence Systems and Tata Power SED, based here.
There is broad agreement that the consortium should include three to five major Indian companies, which would lead a group of foreign and domestic subcontractors, said one executive with the Federation of Indian Chambers of Commerce and Industries (FICCI), an industry lobby group.
Despite broad agreement, the firms seem to be stuck on the question of a lead contractor, the FICCI executive said, with Tata Power SED and Larsen & Toubro appearing to be the favorites.
The executive said a group of three to five major Indian companies can handle the job.
The consortium could be created on the lines of the Chinese ARJ-21 project, which has about 58 overseas and domestic private-sector vendors supplying various parts, said an executive of another industry lobby group, The Associated Chambers of Commerce and Industry of India.
One Air Force official said private companies already supply equipment and material to HAL-led efforts to build and upgrade aircraft and helicopters.
Aero structures, simulation material, avionics, metals and composites, and system engineering support have been supplied by domestic private-sector defense companies, including Larsen & Toubro, Tata Consultancy Service, Godrej, HCL Technologies and Tata Power SED, the Air Force official said.
MTA Program
The initial MTA contract calls for the manufacture of 56 aircraft to replace Indian Air Force Avros. The service's Russian-origin Antonov An-32 transport aircraft are already being upgraded.
HAL, which has annual sales of $3 billion, has its hands full. Outstanding orders include the Russian-licensed production of Su-30MKI; BAE Systems Hawk 100; the Indo-Russian fifth-generation fighter aircraft program; an upgrade of 51 aging French Mirage aircraft; and production of a variety of helicopters for the Indian defense forces.
The MTA program eyed by the proposed consortium is in addition to the finalized MTA deal with Russia.
The joint Indo-Russian deal is targeted to have an initial market of 200 MTAs, with Russia buying 100, India 45 and the remaining 60 earmarked for exports.
A 50-50 joint venture of Russia's United Aircraft Corp. and Rosoboronexport have agreed to participate with HAL on an equity-sharing basis to build the 15-ton MTA.
There are about 100 medium-lift An-32 aircraft and about 30 heavy-lift Il-76 aircraft in the Air Force's fleet.
India has already contracted purchase of C-17 heavy-lift aircraft and the C-130J Hercules from the U.S., and repeat orders are planned to augment the cargo aircraft force.
Last month, Ukrainian company Antonov handed India five updated An-32 transports, the first batch in a 105-aircraft upgrade deal.
India inked a $400 million contract with Ukraine in 2009 to upgrade the An-32 aircraft.
"India needs a competitor to HAL, especially a private-sector consortium, so that the Indian defense forces are able to get aircraft and helicopters on time and integrated with superior and advanced technologies and systems," analyst Nitin Mehta said
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