Defense Technology International - October 2007 - (Page 22) DISPATCHES GLOBAL INDUSTRY JUMP-START India uses offsets in fighter contract to boost defense manufacturing NEELAM MATHEWS•NEW DELHI semblies and end items, says Terry Lee, the director of business development. Other likely bidders have signed preliminary agreements to develop projects. These include: Boeing, with engineering firm Larsen & Toubro; Northrop Grumman, with Bharat Electronics and Dynamatic Technologies; HCL Technologies, with Smiths Aerospace, and Northrop Grumman, with Satyam. Following its success in manufacturing ring forgings for Rolls-Royce, HAL is expected to qualify as a Rolls-Royce component supplier for blades, casings and shafts. This will fulfill part of the British company’s bid for defense offsets in the future, says Rolls-Royce India managing director Tim Jones. “There is no reason why basic raw materials cannot be sourced,” Jones adds. “Until now, there has been no process to assure control of the quality of supply.” Advanced materials, including composites and alloys, are also being considered for local manufacture. Some Indian companies, expecting a boom in manufacturing, are developing business incentives. For example, Quest Global, an engineering services and manufacturing company, plans to establish a special economic zone in Belgaum, Karnataka, to develop an aerospace supply chain. CEO Ajit Prabhu says the timing of the RFP supports development of the zone. “We are positioned to o er aerospace companies design and manufacturing services there.” Quest’s 300-acre zone will include precision machining shops that can be sourced for offsets. Talks are on with domestic and international companies to establish facilities. The site is to be operational early in 2008. Meanwhile, Prabhu says Quest, which has a U.S. facility in East Hartford, Conn., can support large orders from OEMs that don’t have a presence in India and do not want joint ventures. Quest has the expertise: It works with all three global jet-engine makers—GE, Rolls-Royce and Pratt & Whitney. The U.S. is open to getting some defense work done o shore, Prabhu says. Quest recently filed with the U.S. Defense Dept. as an approved vendor for work in India. I www.aviationweek.com/dti AERONAUTICAL DEVELOPMENT AGENCY O ne of the world’s largest military deals, India’s $10-billion medium multirole combat aircraft, has vendors scurrying to find local partners to meet a demand for o sets covering 50% of the contract value. Requests for proposals were issued Aug. 28 to six manufacturers, including Lockheed, Boeing and MiG. The contract calls for 18 jets to be purchased in flyaway condition, with the remaining 108 made in India under a technologytransfer agreement. The government is using the contract to strengthen India’s defense industry. A major focus is reducing the country’s dependence on foreign sources of technology and equipment supply. “We were lulled in the past into believing that technology transfer was taking place when it was production technology, not design technology and data,” says Jasjit Singh of the Center for Air Power Studies in New Delhi. “This is why we had to go back to Moscow to upgrade less sophisticated aircraft like the MiG-21. The Sukhoi Su-30 is now being manufactured under license, but we don’t know how much design data is being transferred.” With bids to be submitted in six months, however, many issues concerning offsets are unresolved. These include: the time required for technology transfer; the ratio of source work that India wants to acquire technology through its new fighter order, making its own projects—like the Tejas light fighter—more competitive. can be executed versus manufacturing, and the process to qualify Indian companies for approval by the government. Some bidders want to count business already under contract toward offset requirements, says EADS country head Stefan Bilep. EADS has added India to its supply chain, working with Hindustan Aeronautics (HAL) on projects such as helicopters. “Countries that allow offset credit banking have realized the benefits of o sets almost immediately from multiple vendors without having to wait for the conclusion of the acquisition contract,” says Orville Prins, vice president of business development at Lockheed Martin. Not all o sets would be based on the jet-fighter order, says David R. Hamilton, vice president of Eurofighter marketing. It could be in aerospace work or in development of a light combat aircraft. Meanwhile, the race to identify Indian defense companies as manufacturing partners is on. Raytheon International, for instance, has already started looking for companies capable of building select air- and missile-defense components, as- 22 DEFENSE TECHNOLOGY INTERNATIONAL OCTOBER 2007 http://www.aviationweek.com/dti
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