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‘Make in India’ mandates for Aircraft manufacturing

  • Category
    Economy
  • Published
    21st Jul, 2023

Context

According to a latest update, for boosting the Indigenous Aircraft manufacturing in India, Final Assembly Line (FAL) at Vadodara has been introduced in partnership with Tata Advanced Systems Limited (TASL) under ‘Make in India’ Obligations.

More about the news

  • In addition the above, the first aircraft -Airbus C295, manufactured in India would be delivered in September 2026.
  • The C-295 is an aircraft of 5-10 tonne capacity used for tactical transport of up to 71 passengers or 50 paratroopers.
  • It will replace the Indian Air Force’s ageing fleet of Avro-748 planes
  • It will be used for logistic operationsto locations that are not accessible by current heavier aircraft.
  • India has become the 35thC-295 operator worldwide.
  • The first made-in-India aircraft is expected from September 2026 and completed by 2031 at the rate of eight aircraft per year.
  • Important features:
    • With a flight endurance of up to 11 hours, can carry out multi-role operations under all weather conditions.
    • It can operate from short or unprepared airstrips.
    • The C-295 has very good fuel efficiency.

Aircraft Industry in India:

  • India has a much bigger footprint in civil aviation manufacturing than defense, in addition to being a market itself.
  • India is currently the 7th largest civil aviation market in the world.
  • Defense aircraft Industry
    • India has the third largest armed forces in the world and plans to spend billions of dollars on defense articles over the next several years. 
    • India’s resolve to drastically reduce its reliance on imports is referred to as “Aatmanirbharta” (self-reliance).

Indigenisation of aircraft industry

  • It is among the five fastest growing aviation markets globally, registering a growth rate of over 15.2 per cent year-on-year.
  • Despite this high rate of growth, the country is one of the least penetrated air markets in the world with 0.04 trips per capita per annum compared to 0.3 in China and more than two in the US.
  • With ‘Make in India’ initiatives, it is estimated that huge procurement costs can be significantly reduced.
  • Additionally, this will enable building up of manufacturing capabilities spurring the much needed growth of the economy.

‘Make-in-India’ and offset obligations:

  • Indigenous Production under the Defence Acquisition Procedure, 2020:
    • The Defence Acquisition Procedure, 2020 (“DAP 2020”) which governs capital acquisition for the defence sector, sets out certain categories (methods/routes) under which the Ministry of Defence undertakes capital procurement.
    • These categories are ranked in order of procurement preference, with the purchase of indigenously designed, developed and manufactured products being the highest priority and outright purchase of fully formed equipment being the lowest priority.
  • Other mandates:
  • In addition to the categories for purchase of equipment, the DAP 2020 also envisages the ‘Make’ procedure of procurement which promotes indigenous design and development of prototypes of military equipment.
    • The aim is in line with the wider Make in India policy, and to develop long term defence capabilitie
    • Once products are designed and developed under Make, they are procured by the Ministry of Defence under either the Buy (Indian-IDDM) or Buy (Indian) category (as applicable).
  • Local Procurement Preference:
    • The Public Procurement (Preference to Make in India) Order, 2017 grants general purchase preference in government tenders to local suppliers.

Attempts made so far:

  • FDI: Foreign investment of up to 49% is allowed under the automatic route.
  • UDAN Scheme: The Ministry of Civil Aviation (MoCA) launched Regional Connectivity Scheme (RCS) – Ude Desh ka Aam Nagrik (UDAN)in 2016.
  • National Policy: In 2016, the Ministry of Civil Aviation released the National Civil Aviation Policy (NCAP).
  • Two Defense Industrial Corridorsin the Indian states of Uttar Pradesh and Tamil Nadu were announced in the 2018-2019 budget, which will attract manufacturers and suppliers.
  • 10-year Integrated Capability Development Plan: India is formulating the 10-year Integrated Capability Development Plan, which would be the basis for future defense procurement. 
  • Made in India:
    • The state-owned Hindustan Aeronautics (HAL) has manufactured indigenously in large numbers, the multi-purpose light transport aircraft — Dornier 228 aircraft. HAL bought the production licence for this aircraft from the German firm Dormer GmbH in 1983.
    • Recently Made-in-India light combat helicopters Prachand' has been inducted into Indian Air Force.
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