(LiveMint) :The Tata group has boosted its chances of becoming the preferred local partner of US firms bidding to sell medium multi-role combat aircraft (MMRCA) to India in the world’s largest fighter jet deal.
On Monday, Tata Advanced Systems Ltd, a subsidiary of Tata Sons Ltd, signed an agreement with Lockheed Martin Corp. to form a joint venture (JV) company, Tata Lockheed Martin Aerostructures, to build aerostructures for the C-130 aircraft produced by the US firm.
Tata Industries Ltd, another group company, had formed a joint venture with Boeing Co. in 2008 to manufacture defence-related aerospace components in India for export to Boeing and its clients worldwide.
Both Lockheed Martin and Boeing are in the race to sell 126 MMRCA to India for $11 billion (Rs.50,050 crore), along with Sweden’s Saab AB, Paris-based Dassault Aviation SA, Moscow-based United Aircraft Corp., and EADS NV. Bidding is expected to begin in a month.
Whoever wins the contract will have to source components and systems from local vendors worth at least 30% of the order’s value, under India’s defence offset policy.
Tata Advanced Systems has also teamed up with Sikorsky Aircraft Corp. and United Technologies to manufacture S-92 helicopter cabins in India.
India is becoming one of the world’s largest military spenders, with the third largest defence procurement budget in Asia, according to a recent report by Deloitte Consulting India Pvt. Ltd. For 2010-11, India earmarked $32.03 billion for national defence, including $13.04 billion for acquiring new weapons systems equipment and services.
The procurement budget is estimated to rise to $42 billion by 2015, making India one of the most attractive defence markets, Deloitte said.
“Capabilities of Indian automotive companies, low-cost manufacturing centre and offset policies are driving more Indian companies to forging tie-ups with international aerospace majors,” said John Siddharth, industry analyst, aerospace and defence, for South and West Asia at consulting firm Frost and Sullivan. “However, Indian companies need to create high confidence levels in the global market, and this can be done by tying up with experienced global partners. Tata group is also looking at creating global aerospace brand by partnering with international aerospace companies to enable itself to venture into the international market,” he added.
The Tata Lockheed Martin Aerostructures facility will come up near the Hyderabad airport in the later part of the year, a Tata Sons spokesperson said in an email.
The facility is export oriented. Its products will form a key aircraft structure that Lockheed Martin will integrate and complete for global C-130 aircraft customers, a statement said. Investment details were not disclosed.
The Lockheed C-130 Hercules is a four-engine turboprop military transport aircraft. The Indian Air Force recently inducted the C130J Super Hercules tactical airlift transport aircraft.
On Monday, Tata Advanced Systems Ltd, a subsidiary of Tata Sons Ltd, signed an agreement with Lockheed Martin Corp. to form a joint venture (JV) company, Tata Lockheed Martin Aerostructures, to build aerostructures for the C-130 aircraft produced by the US firm.
Tata Industries Ltd, another group company, had formed a joint venture with Boeing Co. in 2008 to manufacture defence-related aerospace components in India for export to Boeing and its clients worldwide.
Both Lockheed Martin and Boeing are in the race to sell 126 MMRCA to India for $11 billion (Rs.50,050 crore), along with Sweden’s Saab AB, Paris-based Dassault Aviation SA, Moscow-based United Aircraft Corp., and EADS NV. Bidding is expected to begin in a month.
Whoever wins the contract will have to source components and systems from local vendors worth at least 30% of the order’s value, under India’s defence offset policy.
Tata Advanced Systems has also teamed up with Sikorsky Aircraft Corp. and United Technologies to manufacture S-92 helicopter cabins in India.
India is becoming one of the world’s largest military spenders, with the third largest defence procurement budget in Asia, according to a recent report by Deloitte Consulting India Pvt. Ltd. For 2010-11, India earmarked $32.03 billion for national defence, including $13.04 billion for acquiring new weapons systems equipment and services.
The procurement budget is estimated to rise to $42 billion by 2015, making India one of the most attractive defence markets, Deloitte said.
“Capabilities of Indian automotive companies, low-cost manufacturing centre and offset policies are driving more Indian companies to forging tie-ups with international aerospace majors,” said John Siddharth, industry analyst, aerospace and defence, for South and West Asia at consulting firm Frost and Sullivan. “However, Indian companies need to create high confidence levels in the global market, and this can be done by tying up with experienced global partners. Tata group is also looking at creating global aerospace brand by partnering with international aerospace companies to enable itself to venture into the international market,” he added.
The Tata Lockheed Martin Aerostructures facility will come up near the Hyderabad airport in the later part of the year, a Tata Sons spokesperson said in an email.
The facility is export oriented. Its products will form a key aircraft structure that Lockheed Martin will integrate and complete for global C-130 aircraft customers, a statement said. Investment details were not disclosed.
The Lockheed C-130 Hercules is a four-engine turboprop military transport aircraft. The Indian Air Force recently inducted the C130J Super Hercules tactical airlift transport aircraft.
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