The Indian armed forces are upgrading their ageing fleet and that means big orders and big money, running into billions of dollars, for these companies.
According to Reuters, Indian Navy plans to induct 50 light helicopters. First off the block is an order for 16 multi role helicopters. Indian Army has a joint requirement for about 400 light helicopters along with the Air Force. Some companies are upbeat about the recent contact to buy war planes worth $15 billion that the government awarded to France's Dassault Rafale.
Mick Maurer, president of Sikorsky Military Systems, says the procurement process in India is getting better. "It is more rigorous and more transparent. We believe that suits us very well." Maurer says in the long term, Sikorsky sees a 3:1 ratio vis-a-vis the military and commercial sales in terms of the size of the market. But he says both are very complementary markets. Many of the machines can be used for commercial and quasi-defence activities.
If the civil copter market in India has come alive, it is thanks to the armed forces. Foreign companies in the defence market are bound by what is called offset obligations. India's defence procurement policy rules that foreign companies require that win contracts of 300 crore or more must procure equipment worth at least 30% of the deal amount from local suppliers to boost the homegrown arms industry.
The Indian military has also become smarter, according to foreign company executives. "Sometimes manufacturers give a special price on aircraft, but raise the price on the support side. India has become aware of this and now looks at the total lifecycle costs in deals," says Maurer.
The upshot is that companies like Sikorsky and Eurocopter have partnered Indian counterparts to set up base in India. Sikorsky has formed two joint ventures with the Tatas to make helicopter cabins and aircraft components. Eurocopter, which formed an Indian unit in 2010, has tieups with the Mahindras, the Tatas and governmentowned Hindustan Aeronautics Limited. AgustaWestland, the helicopter unit of Finmeccanica SpA of Italy, has a joint venture with the Tatas called Indian Rotorcraft.
All these companies plan to expand in India. Textron, the parent company of Bell Helicopter, has opened a new global technology centre in Bangalore with more than 400 engineers. Bell plans to expand the workforce there over the next year, says the company's India head, BS Singh Deo. An AgustaWestland spokesman says the company recently opened a new larger office in Delhi. Copter makers are also expanding the customer support network by establishing authorised service centres along with a posse of engineers and technicians.
All this bodes well for the commercial market. The AgustaWestland spokesman says construction work is about to start on the Indian Rotorcraft's facility in Hyderabad , which will produce the company's eight-seat utility helicopter AW119. Sikorsky eventually plans to produce helicopters that are virtually "100% done here" . "We are already a local company," says Maurer.
Helicopter makers eye Indian military deals
March 9, 2012, India - A raft of helicopter makers such as Boeing, Sikorsky Aircraft Corp, Bell Helicopter, Eurocopter and AgustaWestland are hovering over the civil market in India. But they are also eyeing a bigger prize: military deals.
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