REPORT ON

INDIAN AEROSPACE FEW PLAYERS FEW PROF

SUBMITTED BY:-
AAYUSH SHARMA
11813249
PRIYANSHA RAJ
11813177
RASHMI BURMAN
11813234

Submitted to :-
Dr. pooja kansara
 EVALUATION PARAMTERS FOR WRITE UP

CATEGORY 1 2 3 4 5 Points
awarded
Introduction The topic The topic Introduces The topic Does not
(topic sentence is an sentence is a the sentence does display an
sentence) excellent good paragraph. not introduce understanding
(5marks) introduction introduction It does not the paragraph. of the topic.
to the to the introduce (2) Not in line with
paragraph. It paragraph. It the topic the topic. (1)
tells the main may too very well
idea and broad or have and it
gives the big a detail includes too
picture (5) included. (4) many
details. (3)

Links to the Student Student Student Student makes Student makes

other makes no makes a makes many errors in more than ten
readings/ errors in couple of several linking or errors in
references linking or errors in errors in reffering the linking or
(5marks) reffering the linking or linking or case.(2) reffering the
case (5) reffering the reffering case.(1)
case.(4) the case (3)

Ideas The topic has Student Student uses Information is

(5 marks) been The topic has knows the just the facts to gathered from
discussed been subject but relay thoughts. electronic
from discussed not related There is not sources but the
different properly and it with much of the student does
angles and student has a different student's own not know its
student has good grasp of angles (3) personality in relevance and
given the subject. the writing (2) importance (1)
excellent (4)
grasp of the
topic. (5)
Sequencing The answer is The answer is The answer The answer is The content is
(5 marks) proper in seqence is sequence somewhat in least sequenced
sequence and and contains and sequence with (1)
does not very few contains the topic but the
contain any theoretical few content is not
theoretical errors (4) theoretical convincing.(2)
errors (5) errors (3)
Practical Student Student Student has Student makes Student has not
application makes no makes little tried to many errors in related with
and relating errors in error to relate relate the practical practical
concepts with appropriate the concepts concepts application and applications
Real World practical practically practically no clear and no
and application and Clear and Clear conclusion can conclusion can
Conclusion and Detailed conclusion is conclusion be formed from be formed.(2)
(10 mark) conclusions reached from is reached the facts
are reached the facts from the offered.(4)
from the facts offered.(8) facts
offered.(10) offered. (6)
TOTAL

Note:
1. No Assignment will be catered after due date.
2. One Group will submit one write up in online mode.
3. Evaluation should be done strictly on the basis of the Rubrics attached.
4. Peer rating has to be done and the gap for maximum and minimum marks allotted should be of 3 marks.

Peer rating :
Aayush Sharma  10
Priyansha Raj 10
Rashmi Burman 10
Monica Reddy  7
INTRODUCTION
Indian aerospace industry primarily comprises public sector units (PSUs) promoted by the government
of India over several decades. While Bangalore has emerged as the hub of aerospace industry in India,
smaller aerospace clusters are located around the cities of Delhi, Chennai, Hyderabad and Nagpur. The
city of Bangalore qualifies as the hub of aerospace industry of India, thanks to the mushrooming of
aerospace industry, research institutions and increased global in the last five decades. The State owned
Aerospace major, the Hindustan Aeronautics Ltd (HAL) set up its shop in the year 1964. In fact, the
seeds for HAL were sown in the shape of Hindustan Aircraft Limited, a joint initiative of Seth
Walchand Hirachand and the erstwhile princely State of Mysore in the year 1940. The government took
over this company and renamed it as HAL. Bangalore also hosts the prestigious National Aerospace
Laboratory (NAL), the Indian Space Research Organization (ISRO) and the Indian Institute of Science
(IISc). These three organizations created the R & D infrastructure to drive forward the initiatives of
HAL.

In recent times, there has been an increased debate to identify the bottle necks, which are holding
back the projected explosion of the aerospace sector in India. While compatriots such as Israel,
Brazil and China have been making significant mark in the global aerospace pie, India has not
geared up to the challenge till date. While the country has a long history of government support
for establishing and nurturing defense aircraft production as well as R & D institutions, we are
somehow left behind in the race. Thanks to the economic liberalisation initiated in the year
1991and subsequent easing of government control over the aerospace sector, many indigenous
companies have started producing aircrafts, albeit at an insignificant proportion compared to global
levels.In this backdrop, this paper explores the current scenario of Indian aerospace industry,
comprising many public and private sector companies. We discuss the possible influence the new
aerospace policies will have on Indian and overseas companies. A SWOT analysis is done to trace
the position of Indian aerospace industry in the global market and possible policy push required to
strengthen the industry
MAJAOR PLAYERS IN THE INDIA AEROSPACE INDUSTRY

Historically, the aerospace industry all over the world initially thrived on the development and
production of military orders, and India is no exception to this rule. HAL was the lone flag bearer
of Indian aerospace industry in India till recently and it heavily concentrated on manufacturing
military aircrafts with license from the Russians. It has 19 production units and 10 Research &
Design centers in 8 locations in India. HAL has an impressive portfolio of 15 aircraft / helicopters
manufactured with in-house R&D and 14 under license from various original equipment
manufacturers from around the world who have delivered helicopters, aircrafts to Indian Air Force
(IAF). However, since 1990s, thanks to the support of NAL, IISc and a host of defense research
organizations, HAL has developed indigenous aircrafts such as Tejas, Advanced Light Helicopter
(AJH), Intermediate Jet Trainer (IJT) and the Light Combat Helicopter (LCH). NAL also designed
and manufactured SARAS, a re-engined version of 14-seater SARAS will get clearance for low-
speed taxi trials. IAF has indicated to procure 100 aircrafts which will provide additional influx of
money for R&D and improvement of the performance of the vehicle. In recent times, the global
majors such as Boeing, Airbus, EADS and Bell Helicopters have started their operations in India,
albeit in a small way. A few Indian companies too have joined the competition in order to gain
technical footprint and significance in aerospace industry and hopefully, around the globe in years
to come. The list includes TAAL, Tata Technologies, Mahindra Aerospace, Tata Advanced
Systems LimitedThe Indian aerospace companies need to rise up to the challenge and take the
opportunity by open hands. Otherwise, in the era of Globalization and compulsions for the
Government of India to completely open up the sector for foreign players, the Indian aerospace
industry will be completely dominated by established companies from western countries in the
coming years. The real strength of Indian aerospace industry is its skilled resource. Highly skilled
workforce, who are effortlessly adaptable to various changes that they face has made Indian
workforce respected and most sought after worldwide. This is forcing leading aerospace industries
to have their office in India, particularly at Bangalore. The strategy is to move their operations in
design, analysis, and consultancy initially and over the time move their manufacturing expertise
into the region. Indian players such as Taneja Aerospace & Aviation Ltd. (TAAL), Tata Aerospace
and Mahindra Aerospace are making attempts to foray into the Original Equipment Manufacture

Aerospace Market Research

Agenda
• Global Aviation
• Trends in Regional Aviation
• Challenges
• Opportunity

Aerospace Market Research

  Civilian aerospace

 Military aerospace

Civilian aerospace

 Passenger air traffic demand to grow 4.9%/yr.

 World fleet of both passenger and Freighter aircraft to grow from 14980@ end of 2006 to
nearly 33000 by 2026
 The worlds airline will require more than 6000 smaller aircraft(30to100 seats) to serve
regional demands.
 Passenger traffic to grow in developing countries like India and China. Asia pacific region
to witness 7.2% growth Y-o-Y during 2007-16.
 Freight carriers to increase by six fold during 2006-26 period.
 People want and need to fly.

 Military aerospace

 The U.S military aircraft industry evolving continuously for almost a century. With number
of prime contractors peaking at 16 in 1945.
 Changes in the industry structure particularly the numbers of dominant firms are closely
associated with revolutionary changes in technology e.g. Jet engines, low observability.
 Current military aircraft fleet around 39000.With 62% fleet in North America and
Europe.F-16s the largest fleet accounting 8.5% of the total.
 Innovation the key.
IMPACT OF NEW POLICIES ON AEROSPACE CLUSTER

Indian government has launched the ambitious project named “Make in India” in September, 2014.
The objective of this project is to accelerate manufacturing industry in India. It aims to encourage
companies, domestic and international to manufacture their products in India with the aim of
making India top destination globally for foreign direct investment. This is a great opportunity for
manufacturing industry which has by far stood in the shadow of the giant software industry in
India [6]. India has many established manufacturing cluster but only Bengaluru stands out when it
comes to aerospace cluster. Prior to launching of programme foreign sector caps in various sectors
had been relaxed, applications were made available online and period of licenses increased to three
years. FDI in defence has been increased from 26% to 49%. This aims to reduce the massive
imports that India has in military products. Through Make in India is focused of all manufacturing
industries, some of the major leads in aerospace sector are as follow

SWOT ANALYSIS OF INDIAN AEROSPACE INDUSTRY

In the backdrop of rapid growth of aerospace industry in India and elsewhere, it is interesting to
see where the Indian aerospace industry stands vis-à-vis the global market. An analysis of
Strengths, Weakness, Opportunities and Threats (SWOT) is attempted in this section to bring out
the current scenario and future prospects of the Indian aerospace industry.
A. Strengths
India is emerging as one of the strong players among the emerging aerospace industry, which
includes countries such as Israel, Brazil, China and Mexico. The major strength of India lies in the
manpower. About 60 % of Indians are below 40 years of age and is considered to be young nation.
The country has large pool of engineers, diploma and ITI holders. Airbus and Boeing both have
established their R&D unit in Bengaluru. This has further led to establish their manufacturing unit,
though on small scale. India is the ninth largest civil aviation market in the world and is projected
to become the third largest by 2020. The impacts of civil aviation is directly on maintenance,
repairs and overhaul (MRO) industry and is expected to be a huge revenue generating market in
near future. Even though this is not directly related to original aircraft manufacturing, it can
strengthen the overall eco-system that can promote the industry at large. The geographical location
of India covered by oceans on three sides gives it a strategic advantage in linking Africa, South
Asia and Australia. Manufacturing clusters in Chennai and Gujarat have thrived basically due to
this advantage. In addition, several educational, scientific and technical educational institutions
are fostering domain expertise in IT, engineering and design skills that can be leveraged by
aerospace .

B. Weakness
Absence of established Original Equipment Manufacturer (OEMs) may be considered the main
weakness of Indian Aerospace Industry. Although HAL has been driving the aerospace industry
clustered at Bengaluru, it lacks the ability to be a competitive player beyond its national boundary.
This has further resulted in the lack of cutting edge technologies which the aerospace companies
expect. Lack of modernization and competitiveness, which has historically accumulated over a
long period of controlled regime, has to be done away with, which is easier said than done.
Dismantling of restrictive policy regime and policy reforms are taking a long time in the making
[9]. This has put a dampener on the entry of foreign players into the Indian manufacturing space.
Entry of foreign players can enable rapid modernization and scaling up of the industry. Unless
policy reforms are accelerated, these changes will take a long time to materialize. One of the weak
links in the aerospace supply chain is the lack of tier 2 and tier 3 companies, which can support
the aircraft manufacturers. Most of the SMEs are struggling to move up the value chain. Unless
the SMEs graduate to tier 2/tier 3 status, there will still exist a huge gap in the local supply chain,
which will discourage foreign aircraft manufacturers to set up shop in India. Poor infrastructure
and incomplete projects project a poor picture for companies potentially outsourcing to India.
Though big projects are announced, the completion rate remains a matter of concern. Roads, water,
power and transport which are dependent of government are also affected by regime changes.
Companies which have potential of exports further depend on infrastructure for catering to foreign
markets. Last but not the least, the non-availability of institutional finance on affordable and easy
terms is hindering access to new technologies. In India the situation is further complicated by the
fact that the preferred mode of finance is either self or other sources
There is a vast opportunity of growth in the commercial (passenger/freight) sector of aerospace.

C. Oppurtunities
India should recognize its lack of expertise in developing a commercial or defense aircraft and it
should leverage the opportunity to get the knowledge in technological and managerial expertise
from foreign Original Equipment Manufacturers (OEMs).Growing commercial aviation market
and increased defense spending has made Indian aerospace industry one of the fastest growing
aerospace markets in the world. This has made leading global manufacturers to look towards
manufacturing in India. Various agencies estimate aerospace engineering and manufacturing
industry to have revenue of between US $8 billion to US $15 billion by 2020 [10]. Aerospace
OEMs are restructuring supply chains to address increases in raw material prices, a weakening US
dollar, increasing demand from Asia and rising lead times. This provides an opportunity for local
suppliers to gain knowledge in a niche manufacturing sector such as aerospace industry. Also,
even if companies decide to bring in their own subsidiaries it will still increase job opportunities
in localized clusters. India has skills and competencies in areas that include engineering,
production, aircraft maintenance, etc. These capabilities have been recognized and harnessed by
foreign companies outsourcing manufacturing work to India. A potential opportunity exists in
demonstrating India’s expertise in the process beginning right from initial design and ending with
the final manufacture; this is where India’s real and sustainable advantage exists.

D. Threats

Threats are part and parcel of a highly competitive and technologically intensive industry such as
the aerospace industry. The first and foremost threat is the geo-political factors, which can pose
challenges for free flow of passenger traffic and cargo between countries. While this threat is
common to all aircraft manufacturers, new entrants in the market are feared to receive higher
impact due to uncertainties compared to established players. Secondly, dumping from developed
countries could pose long time problems for the industry. Stringent norms in developed countries
many a time forces processes which are having enormous effects on environment to developing
countries in the name of off shoring. Casting and forging aresuch common processes. Migration
of labours from other industries might be one of other undersized threats, but given the large
workforce India has this might not be such a problem. The product development cycle time is
longer inaerospace Industry compared to any other industry. companies need to invest huge capital
for a long duration of time.The number of certifications, qualification of personnel employed, high
precision equipments, technological know how and implementations of best practices in
manufacturing are some of the key requirements in this segment. This makes the probability for
success very less thereby increasing the risk involved. Regional companies will face severe
competition if MNCs venture into tier-2 and tier-3 segments. The reason is that R&D function is
virtually absent in such companies and they would be lagging behind in many areas such as quality,
process and finance when it comes their peers from established industry.
Challenges
1) Poor infrastructure to support the aviation Industry. passenger travelling by
air have risen faster than the transport system to handle them.
2) Congestion cost to passenger and airlines is estimated to be 1.7 Billion pounds
and expected to be excess of 5 billion pound by 2015
3) Increased global terrorism has impacted the UK avaition industry negatively,
increasing cost of security for airlines and operational costs

Results of interpretation

• With the Asia-pacific region and mainly the Indian Sub-continent the growth stimulator,
many manufacturers keen to focus on the needs of these region.
• Many new entrants in the industry to survive on the race with their innovative capability.
• The market could see many new joint ventures like Lockheed-Martins, that will change the
equations in the market.
• Major players in the industry like Airbus and Boeing to focus jointly on both civilian and
military needs of the aerospace industry to cope with market depression and maintain the
sales and profit margins.
• Diversification of the products will ensure better market positioning.
CONCLUSIONS

The Indian aerospace industry is on the threshold of significant growth thanks to many favourable
factors such as the existence of a strong defence aircraft production base, large pool of well
qualified engineers and technicians, availability of skilled workforce, large number of SMEs
clustered around major aerospace hubs and so on. While there is likely to be huge growth in
demand for civilian aircraft in Asia and Middle East countries, one cannot discount the growth of
domestic market due to growing middle class demand for air travel as well as air cargo demand
from the Indian industry. Success of established aerospace industries has shown that domination
over world market depends on the company’s ability to invest both efforts and money in new
technologies. Major achievements in public sector companies like Tejas from HAL has shown
promises of further milestones whereas NAL, ADA and DRDO have also made major strides in
their core competencies. The SWOT analysis reveals that the policy makers can make a huge
difference in realizing the potential of the industry. Policy reforms and encouragement of more
FDI in the sector can scale up the industry, which is highly capital intensive [11]. The government
also has to take proactive measures to improve civil infrastructure and utilities such as power and
water. Good road, rail and air connectivity is a must for the industry to thrive. The fact that the
industry is tiered into 4-5 layers, each layer being a key player in the scheme of things is unique
feature of the aerospace industry. The Indian SMEs have to gear up to provide reliable and quality
products to OEMs, which presently is not adequate. While there are many small firms, who can be
positioned as tier 4 companies, the challenge lies in moving up to the status of a tier 2 or tier 3
companies. The government can step in and provide preferential finance and technology support
for this transformation to happen. In the short run, it would be unrealistic to expect the emergence
of many indigenous aircraft manufacturers due to high investment and long development cycle
time. On the other hand, the policy makers should ensure that more number of OEMs and critical
component suppliers will emerge and give the big push for the industry into the world arena.
Further, we need to qualitative analysis of the technological level of different tiers of Indian
aerospace industry. This can be matched and compared with companies at same level in developed
aerospace industries. These will some interesting insights into shortfall the Indian companies are
facing. This will be even beneficial for global OEMs which might find easy to migrate their
manufacturing load to India when they have top quality vendors operating in the Industry.
REFERENCES
[1] Mani, Sunil. (2010) The Flight from Defence to Civilian Space: Evolution
of the Sectoral System of Innovation of India's Aerospace Industry. Centre for
Development Studies.

2] www.nal.res.in

[3] http://www.taal.co.in/

[4] http://www.tataadvancedsystems.com/

[5] http://www.mahindraaerospace.com

[6] Chandra, S., Shekar, G.L. and Raghavendra, N.V., 2015. Aerospace cluster
of Bangalore: Can the SMEs take up the challenges?. Journal of Asian Business
Strategy, 5(9), p.191.

[7] Shneiderman, Sara, and Louise Tillin. "Restructuring states, restructuring

ethnicity: looking across disciplinary boundaries at federal futures in India
and Nepal." Modern Asian Studies 49.01 (2015): 1-39.
[8] Bollard, A., Klenow, P.J. and Sharma, G., 2013. Indiaʼs mysterious
manufacturing miracle. Review of Economic Dynamics, 16(1), pp.59-85.

[9] Mitra, Arup. "Urban Informal Sector in India." Yojana (2014): 4-7.
[10] Bediér, Christophe, Maxence Vancauwenberghe, and Wolff van Sintern.
"The growing role of emerging markets in aerospace." McKinsey Quarterly 2
(2008): 114.

[11] Hajela, Ashish, and M. Akbar. "Internationalisation of small and medium

software firms from India." International Journal of Technological Learning,
Innovation and Development 2 6.1-2 (2013)