An unprecedented competition announced by the Indian government to energize local private industry in aerospace manufacturing stands on a razor’s edge, with the country’s defense ministry contemplating opening participation to India’s monopolistic state-owned defense companies as well.
A competition to replace the Indian air force’s (IAF) fleet of 56 vintage Hawker Siddley HS748 Avro medium transports was floated last year, specifically excluding state-owned Hindustan Aeronautics Ltd. (HAL) as an Indian contender. But pressure from politicians and lobbyists may squelch that idea. By March, Indian companies will need to submit proposals on how they plan to meet the requirement. If the defense ministry alters the competition, it will land a major blow to a private sector that has long decried preferential treatment and unfair rules for state-owned corporations.
The defense ministry wants a foreign airframer to identify an Indian production partner or consortium (which can include HAL, but not HAL alone) to which it will transfer technology to build 40 of the 56 aircraft at a local production line. The first 16 aircraft will be supplied in flyaway condition by the original equipment manufacturer. India’s minister for heavy industries protested in a letter last November, and the ministry announced it would study his concerns.
Meanwhile, the ministry postponed the last date for submission of proposals from Dec. 8, 2013, to March 8, 2014. Private industry is deeply worried that a reissue of the original request for proposals with participation restrictions expunged would kill the very spirit of the competition. India’s top private industry trade groups have raised sharp concerns.
The IAF’s 1960s-vintage Avro transports, are in poor condition and need urgent replacement. Apart from these, the IAF operates a mix of An-32, Il-76, and C-130J Super Hercules transports. India recently signed a deal with the U.S. government for six more C-130Js.
aviationweek
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