Aerospace & Defense

Overview

The Aerospace and Defense (A&D) business in India is predicted to grow to a value of about $70 billion by 2030 as a result of government initiatives and improved infrastructure. The India defense budget is worth $74 billion in 2023 and is expected to achieve a CAGR of more than 4% during 2024-2028.

Component Manufacturing – This provides a compelling argument for Indian suppliers and global OEMs to consider India as a location for a key position in the global supply chain for aerospace components and parts. The combination of low costs in India and the availability of technical and engineering skills producing high-precision and high-quality components may result in a number of benefits. It is extremely likely that the aircraft business, as well as the services and components associated with it, will experience the same trends as the automotive (small car) industry.

In the past century, government-owned companies like HAL, NAL, ISRO, and others have largely been responsible for the advancement of domestic aerospace manufacturing of aircraft, helicopters, and other aerospace products. However, since the turn of the century, the private sector has aggressively expanded its participation, supported by major corporate houses have successfully entered the aircraft industry.[/vc_column_text]

Manufacturing Industry structure can be broadly classified into

MOD and other government entities: For purchasing aircraft and other equipment for defence and other requirements.
Aircraft/airplane, helicopter, space equipment manufacturers: OEMs largely restricted to PSUs like HAL, NAL, ISRO and other government entities.
Ancillary Manufacturers of aerospace components and assemblies: Various types of metallic, non-metallic and composite parts for engines, aero structures, airplane interiors, space programs etc. for both domestic supply and exports to international manufacturers.
MRO and other service operators: For maintenance and repair services for airplanes and other aircrafts.

India’s aerospace and defence industry is at a pivotal point as a result of the modernization and indigenization initiatives being carried out by all three services of one of the largest military forces in the world. The Indian Ministry of Defence has defined a thorough plan for updating outmoded equipment through long-term perspective plans, capability plans, capability roadmaps, and capital procurement plans. India is one of the biggest importers of weapons and defense platforms, thus the three services have collectively taken it upon themselves to be the forerunners of “Make in India” for the gear and infrastructure being incorporated into their fold. They are supported by specialized inter-service commands and institutions. The “Make in India” (also known as “Aatmanirbhar Bharat”) program of the Indian government has made significant efforts to advance the establishment of an indigenous manufacturing infrastructure supported by the necessary research and development ecosystem. The government of India had also designated the aerospace and defense sector as a focus area for the program

Defence – The structure of the defense industry in India is multifaceted, comprising a mix of public sector undertakings (PSUs), private companies, and partnerships with foreign defense firms.

Public Sector Undertakings (PSUs):

Hindustan Aeronautics Limited (HAL) HAL is one of the key players in India’s aerospace and defense industry, involved in the design, development, and production of aircraft, helicopters, and aerospace systems.
Bharat Electronics Limited (BEL) BEL specializes in the manufacturing of electronic equipment, including radar systems, communication equipment, and electronic warfare systems. 3. Bharat Dynamics Limited (BDL) BDL focuses on the production of missiles and missile systems, including surface-to-air missiles and anti-tank guided missiles.
Mazagon Dock Shipbuilders Limited (MDL) and

4. Garden Reach Shipbuilders & Engineers (GRSE)These PSUs are involved in the construction of naval vessels, including warships and submarines.

Ordnance Factories Board (OFB) OFB is responsible for the production of military hardware, ammunition, and small arms.
BEML LIMITED (BEML)BEML Limited (formerly Bharat Earth Movers Limited) was established in May 1964 as a Public Sector Undertaking for Rail Coaches & Spare Parts and Mining equipment as its Bengaluru complex.
MISHRA DHATU NIGAM LIMITED (MIDHANI)
GARDEN REACH SHIPBUILDERS AND ENGINEERS LIMITED (GRSE)

MIDHANI, is a Schedule B Mini-Ratna Category-I company under the administrative control of Ministry of Defence. It was established to achieve self reliance in the Manufacture of a wide spectrum of critical and complex alloys. MIDHANI caters to the needs of Defence, space, aeronautics, nuclear power, electronics, tele-communications and many other strategic sectors of the country.

Garden Reach Shipbuilders and Engineers Ltd (GRSE), is a Schedule B Mini-Ratna Category-I Shipyard under the administrative control of Ministry of Defence primarily catering to the shipbuilding requirements of India Navy (IN) and Indian Coast Guard (ICG). The company manufactures various types of vessels, ranging from tugs and barges to warships, frigates, bulk carriers, oceanographic research vessels, high powered diesel engines and portable steel bridges.

GOA SHIPYARD LIMITED (GSL)Goa Shipyard Limited (GSL), is Schedule B Mini-Ratna Category-I Shipyard under the administrative control of Ministry of Defence. GSL is capable of indigenously designing and building sophisticated high technology ships for Indian Defence Forces and other varied clients including export markets.
HINDUSTAN SHIPYARD LIMITED (HSL) HSL is one of the largest Defence Shipyards in the country, catering to the needs of shipbuilding, ship repairs and refit of submarines.
ADVANCED WEAPONS AND EQUIPMENT INDIA LIMITED (AWEIL)

AWEIL headquartered at Kanpur has 8 factories located at Kanpur, Cossipore, Jabalpur, Korwa, Tiruchirappalli and Ishapur is engaged in the business of manufacturing weapons and equipment of both small and large caliber

GLIDERS INDIA LIMITED (GIL) GIL headquartered at Kanpur has 1 factory located in Kanpur is engaged in the business of manufacturing parachutes including Brake Parachutes for Fighter Aircrafts etc
TROOP COMFORTS LIMITED (TCL):TCL headquartered at Kanpur has 4 factories located at Kanpur, Shahjahanpur, Avadi and Hazratpur is engaged in the business of manufacturing troop comfort items like Uniforms, ECC, tents etc.
ARMOURED VEHICLES NIGAM LIMITED (AVNL)

AVNL with its headquarter at Avadi, Chennai has 5 factories located at Avadi, Chennai, Yeddumailaram, Jabalpur and Ambernath is engaged in the business of manufacturing of Armoured Vehicle, B Vehicles etc.

MUNITIONS INDIA LIMITED (MIL)MIL with its headquarter at Pune has 12 factories located at Khadki, Aruvankadu, Tiruchirappalli, Bhandara, Bolangir, Chandrapur, Dehu Road, Khamaria, Nalanda and Varangaon is engaged in the business of manufacturing ammunition of all calibers and military, commercial and industrial explosives of various kinds.
YANTRA INDIA LIMITED (YIL)YIL with its headquarter at Nagpur has 8 factories located at Ambajhari, Ambarnath, Bhusawal, Dum Dum, Katni, Muradnagar, Ishapore and Jabalpur is engaged in the business of manufacturing Military Grade components and Ancillary products of Ferrous and Non Ferrous type etc.

17. INDIA OPTEL LIMITED (IOL)IOL with its headquarter at Dehradun has 3 factories located at Dehradun and Chandigarh is engaged in the business of manufacturing optoelectronic items like Tank Sights, Small Arms Sights, Hand held Optical Device etc.

Procurementsfor defence and responsibilitiestooffsetthem

In comparison to wealthy Western countries, the Indian aerospace industry is now relatively tiny ($250 million) in terms of component manufacturing. On the other hand, it is positioned for a phase of rapid expansion over the following ten years thanks to strong tailwinds.

The following list of factors demonstrates the growth:

A significant purchase of military aircraft with offset commitments and prospects.
With a traffic growth of 20%+ over the past five years and significant orders for commercial aircraft from local airlines, India is poised to enter the top three markets in the world for civil aviation.
Availability of talent as well as skills in engineering.
Enabling policy framework by the Government for the creation of the first National Civil Aviation Policy, infrastructure development, and “Make in India” initiatives.

Other Services :

Many global firms, including Boeing, have been examining the potential available for the same because of the rise in all the aforementioned areas, which would also result in an increase in the need for MRO and related services in India. For the aerospace industry’s requirement for manufacturing and services, all of these have a significant potential to provide jobs for technicians and engineers. By 2025, it is anticipated that the MRO market, which provides services for aircraft repairs and maintenance, will reach $4 billion. Additionally, it is possible to provide OEMs with design and engineering services for components and assemblies. With the expansion of the aircraft industry, there would also be a need for leasing, financing, ground support, and other types of services.

Favourable Factors :

With a sharp increase in demand for aircraft and components, India’s aerospace industry is on the verge of taking off on a worldwide scale. The nation benefits from low labor costs, a large supply of engineering, design, and technological competence, active backing for the government’s new policies, and high growth markets, etc. This offers a rare chance for international businesses to enter the Indian aerospace sector across the whole value chain for aerostructures, components, assemblies, and even finished products/aircraft.

Procurements for defence and responsibilities to offset them

The following list of factors demonstrates the growth:

1. A significant purchase of military aircraft with offset commitments and prospects.
2. With a traffic growth of 20%+ over the past five years and significant orders for commercial aircraft from local airlines, India is poised to enter the top three markets in the
world for civil aviation.
3. Availability of talent as well as skills in engineering.
4. Enabling policy framework by the Government for the creation of the first National Civil Aviation Policy, infrastructure development, and “Make in India” initiatives.

Other Services :

Many global firms, including Boeing, have been examining the potential available for the same because of the rise in all the aforementioned areas, which would also result in an increase in the need for MRO and related services in India. For the aerospace industry’s requirement for manufacturing and services, all of these have a significant potential to provide jobs for technicians and engineers. By 2025, it is anticipated that the MRO market, which provides services for aircraft repairs and maintenance, will reach $4 billion. Additionally, it is possible to provide OEMs with design and engineering services for components and assemblies. With the expansion of the aircraft
industry, there would also be a need for leasing, financing, ground support, and other types of services.

Favourable Factors :

Opportunities for the Private sector in India's Defense Industry

Government Initiatives: The Indian government has been actively promoting private sector participation in defense manufacturing through initiatives like “Make in India” and “Atmanirbhar Bharat.” These initiatives aim to reduce import dependency and boost domestic defense production.
Defense Procurement: Private sector companies have opportunities to participate in defense procurement programs. This includes manufacturing components, subsystems, and complete systems for the defense forces. Companies can bid for contracts and supply products to the armed forces.
Naval and Aerospace Industry India’s naval and aerospace industries offer significant
opportunities for the private sector. This includes shipbuilding, aircraft manufacturing, and the production of aerospace components.
Research and Development Private sector companies can engage in research and development activities related to defense technology. This includes developing new technologies, subsystems, and equipment for the defense sector.
Electronics and Communication Systems Private companies can specialize in the development and manufacturing of electronic systems, communication equipment, radar systems, and other technology-driven solutions for the defense sector.
Joint Ventures and Foreign Collaborations Private companies can partner with
foreign defense firms to establish joint ventures or collaborations. These partnerships can involve technology transfer and the co-production of defense equipment.
Cybersecurity With the increasing importance of cybersecurity in modern warfare, there are opportunities for private sector companies to provide cybersecurity solutions and services
to the defense establishment.
Offset Obligations In certain defense procurement contracts with foreign vendors, there
are offset obligations. Private companies can benefit from these obligations by partnering with foreign vendors to fulfill offset requirements.
Export Opportunities India is gradually expanding its defense exports. Private sector
defense companies can explore opportunities to export defense equipment to other countries, subject to export regulations and approvals.
Maintenance, Repair, and Overhaul (MRO) Private companies can offer MRO services for defense equipment, including aircraft, vehicles, and naval vessels.

Key Export Opportunities in the Indian Defense Sector

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Small Arms and Ammunition

India has the capacity to export small arms, ammunition, and related equipment to friendly countries. Indian companies like the Ordnance Factory Board (OFB) and private players can explore export opportunities in this sector.

Radar and Surveillance Systems

Indian companies involved in radar technology and surveillance systems can offer their products and services to other countries. These systems are essential for border security and military applications.

Naval Vessels

Indian shipbuilders, such as Mazagon Dock Shipbuilders Limited (MDL) and Garden Reach Shipbuilders & Engineers (GRSE), have the capability to build naval vessels, including warships and
patrol boats, for export.

Missiles and Missile Systems

India’s Defense Research and Development Organization (DRDO) has developed various missile systems. Private companies like Bharat Dynamics Limited (BDL) can explore exporting these systems to friendly nations.

Aircraft and Aerospace Components

Indian aerospace companies, including Hindustan Aeronautics Limited (HAL), can export aircraft and aerospace components to other countries. HAL’s Tejas aircraft, for example, has garnered international interest.

Cybersecurity Solutions

As cybersecurity becomes increasingly important in defense, Indian companies specializing in cybersecurity can offer their services and solutions to countries looking to strengthen their cyber defenses.

Government Schemes and Initiatives in the Indian Defense Sector

Defense Exports Promotion Policy (DEPP) DEPP is a government initiative aimed at promoting defense exports from India. It provides guidelines and support for defense manufacturers to explore international markets.
Export Promotion Council for Defense & Aerospace (EPDEA) EPDEA is an industry association dedicated to promoting defense and aerospace exports from India. It offers support and guidance to defense exporters.
Defense Export Offset Policy The Defense Offset Policy mandates that foreign defense vendors investing in India’s defense sector must source a percentage of their components and services locally. This creates opportunities for Indian companies to enter into offset agreements with foreign vendors.
Indian Trade Promotion Organization (ITPO) ITPO is involved in organizing defense exhibitions and trade shows, such as DEFEXPO, which provides a platform for Indian defense companies to showcase their products and services to international buyers.
Export-Import Bank of India (EXIM Bank) EXIM Bank offers financial support and services to Indian defense exporters, including export credit, export insurance, and export guarantees.
Foreign Military Sales (FMS) India can participate in the U.S. Foreign Military Sales program, which allows eligible countries to purchase U.S. defense equipment and services. Indian defense companies can explore opportunities through this program.

Regulations & Compliance

Defense Procurement Procedure (DPP)

Private companies need to understand and comply with the Defense Procurement Procedure issued by the Ministry of Defence. This document outlines the procurement guidelines and procedures for defense acquisitions.

Security Clearance

Companies involved in defense production may require security clearances to handle sensitive defense projects. Ensuring that all employees have appropriate security clearances is essential.

Export Controls

Compliance with export controls, including adherence to international export control regimes like Wassenaar Arrangement and Missile Technology Control Regime (MTCR), is crucial when exporting defense equipment or technology

Foreign Direct Investment (FDI) Guidelines

Private sector companies, especially those engaged in foreign collaborations, should be aware of FDI guidelines and restrictions in the defense sector.

Intellectual Property (IP) Rights

Companies should take measures to protect their intellectual property rights and engage in agreements that safeguard their technology and innovations.

The importance of Defense and aerospace for the engineering sector

Technological Advancements

The defense and aerospace industries are at the forefront of technological innovation. They demand cutting-edge solutions in areas like materials science, propulsion systems, avionics, communication, cybersecurity, and more. This drives engineers to push the boundaries of what is possible and results in the development of advanced technologies that often find applications in other industries.

R&D and Innovation

Both sectors heavily invest in research and development (R&D). Engineers working in defense and aerospace have the opportunity to engage in groundbreaking R&D projects that have the potential to revolutionize not only military and aviation capabilities but also other sectors such as healthcare,
telecommunications, and transportation.

Skill Development

Working in defense and aerospace requires engineers to develop a diverse skill set. They must be proficient in areas such as mechanical engineering, electrical engineering, computer science, materials engineering, and systems engineering. This multidisciplinary exposure makes engineers
highly versatile and adaptable.

Safety and Reliability

Ensuring the safety and reliability of aerospace and defense systems is paramount. Engineers in these sectors must adhere to stringent quality control and safety standards. This focus on safety translates into a culture of precision and attention to detail, which is valuable in any engineering
discipline.

Global Collaboration

Defense and aerospace projects often involve international collaborations and partnerships. Engineers in these sectors have the opportunity to work with professionals from around the world, gaining exposure to different engineering practices, cultural perspectives, and problem-solving
approaches.

Economic Impact

The defense and aerospace industries contribute significantly to a nation’s economy. They drive job creation, stimulate economic growth, and generate revenue through exports. This economic stability benefits not only the engineering sector but also the broader population.

National Security

The defense sector plays a vital role in ensuring national security. Engineers contribute to the development of defense systems that protect a country’s sovereignty and citizens. This sense of purpose and responsibility can be a powerful motivator for those working in the field.

Space Exploration

The aerospace industry is closely linked to space exploration. Engineers involved in space missions and satellite technology contribute to our understanding of the universe, climate monitoring, disaster management, and global communication networks.

Influence on Other Industries

Innovations and technologies developed for defense and aerospace often find applications in commercial sectors. For example, GPS technology, originally developed for military purposes, is now integral to navigation systems in vehicles and smartphones.

Global Competitiveness

Developing a strong defense and aerospace sector enhances a country’s global competitiveness. It positions a nation as a leader in technology and innovation, which can attract foreign investment and foster economic growth.

The defense and aerospace sectors provide engineers with a unique and challenging environment that fosters innovation, demands high levels of precision and safety, and contributes significantly to technological advancement and national security. The skills, expertise, and technologies developed in these sectors have far-reaching implications, making them pivotal for the growth and progress of the engineering sector and society as a whole.

Certifications and Standards

Defence Standardization, Quality Assurance, and Certification (DSQAC): DSQAC is responsible for setting standards and ensuring the quality of defense equipment. Companies should strive to meet DSQAC standards for their products.
ISO Certifications: Private sector defense companies should aim for ISO certifications relevant to their products and services. ISO 9001 for quality management, ISO 14001 for environmental management, and ISO 27001 for information security management are commonly sought-after certifications.
CE Marking: If a company manufactures and exports electronic and electrical equipment, it may need to comply with CE marking regulations, especially for products with dual-use potential.
Industry-Specific Standards: Depending on the specific products or components manufactured, private sector firms may need to adhere to industry-specific standards and certifications relevant to the defense sector.

The future for the private sector in making defense equipment in India is promising, with significant opportunities for growth and innovation. However, companies must navigate the regulatory landscape, adhere to quality standards, and prioritize security considerations to succeed in this highly regulated and security-sensitive industry. Collaborations, R&D investments, and a commitment to meeting international standards are key to establishing a strong presence in the Indian defense manufacturing
sector.

space program

The Indian Space Research Organisation (ISRO) and its related establishments play a significant role in India’s aerospace sector. ISRO is responsible for space research, satellite development, and space exploration. In recent years, there have been increasing opportunities for private sector involvement in India’s space industry. Here’s an overview of ISRO-related establishments and private sector opportunities in the aerospace sector:

ISRO-Related Establishments:

ISRO Headquarters: The ISRO headquarters, located in Bengaluru (Bangalore), is the central administrative body responsible for overseeing all aspects of the organization’s activities.

ISRO Satellite Centre (ISAC): ISAC is involved in the design, development, and integration of satellite systems for various applications, including communication, Earth observation, and navigation.

Vikram Sarabhai Space Centre (VSSC): VSSC is engaged in the development of launch vehicle technology, sounding rockets, and vehicle integration.

Satish Dhawan Space Centre (SDSC): SDSC SHAR is the primary launch center for ISRO, conducting satellite launches into various orbits.

Space Applications Centre (SAC): SAC focuses on the development of payloads for communication, Earth observation, and navigation satellites.

ISRO Propulsion Complex (IPRC): IPRC is responsible for the testing and assembling of propulsion systems used in ISRO’s launch vehicles and spacecraft.

ISRO Telemetry, Tracking, and Command Network (ISTRAC): ISTRAC manages the tracking and control of ISRO’s satellite and launch vehicle missions.

Indian Institute of Space Science and Technology (IIST): IIST is an academic institution dedicated to space science and technology education, research, and development.

Opportunities for the Private sector in India’s space Industry

Satellite Manufacturing and Services Private companies can engage in satellite manufacturing, offering satellite-based services such as communication, Earth observation, and remote sensing.
Launch Services Private sector companies have the opportunity to provide launch services for satellites and payloads. ISRO has already started collaborating with private entities for satellite launches.
Space Transportation Developing reusable launch vehicles and space transportation systems is a growing area where private companies can contribute their expertise.
Payload Development Private companies can specialize in the development of payloads for
satellites, including sensors, instruments, and communication equipment.
Space Applications There are opportunities for the private sector to develop applications and services that use satellite data, such as agriculture monitoring, weather forecasting, and disaster management.
Research and Development Private firms can collaborate with ISRO on research and development projects, contributing to the advancement of space technology.
Manufacturing and Components The private sector can supply components and materials for satellites, launch vehicles, and other aerospace systems.
Space Tourism While still in its infancy, space tourism is an emerging sector that holds potential for private companies to offer suborbital and orbital space travel experiences.
Space Exploration As India expands its space exploration efforts, private companies can participate in robotic missions to the Moon, Mars, and beyond, providing technology and services.
Training and Education Private entities can offer training programs and courses in space science and technology to support the development of a skilled workforce.

The Indian government, recognizing the importance of private sector participation in the space sector, has taken steps to facilitate and promote such involvement. Policies and regulations are evolving to enable partnerships, investments, and collaborations between ISRO and private companies. Overall, the Indian aerospace sector, driven by ISRO and the growing private sector involvement, offers diverse opportunities for innovation, investment, and growth in various aerospace-related domains. Airbus has introduced a new manufacturing business model for Make in India that includes land and naval systems by establishing the C 295 manufacturing facility in Vadodara. The majority of “Make in India” initiatives might be attracted technology partners if finance is made available.

This would involve factors that play a part in luring in technology partners, like the stability and ease of doing business in the nation, the accessibility of trained labor, and the presence of a supportive ecosystem for technology and innovation. The sum of these elements ultimately determines whether technology partners will volunteer to take part in the “Make in India” campaign.