Govt contracts needed to jump-start defence manufacturing in India: Airbus

Pierre de Bausset, Airbus India’s President and Managing Director, said the government has to start placing large-scale contracts to boost manufacturing in the defence sector. In an interview with BusinessLine, he said Airbus has offered 5,000 crore as potential investments which will come in when it obtains defence programmes from the government. Excerpts:


What is the update on your collaboration with Mahindra for military helicopters manufacturing?

We want to put India on the world map for military helicopter manufacturing together with Mahindra Defence. To that effect, our partnership with Mahindra envisages creation of a private sector champion in India for manufacturing military helicopters. This includes the Naval Utility Helicopter (NUH), Reconnaissance & Surveillance Helicopter (RSH) and Naval Multi-Role Helicopter (NMRH). When released, the chapter on ‘Strategic Partnerships’ under the Defence Procurement Policy (DPP), may also influence the contours of our collaboration and offering to India.


How is your proposal to build a final assembly line for the Panther helicopter in India developing?

We are proposing to set up a final assembly line in India and make it the global hub for Panther helicopters. The production line will fulfil the Indian order as well as meet export demand. The proposal will materialise if we are awarded the Naval Utility Helicopter (NUH) programme.


What is the latest on the C295W programme?

The evaluation of our proposal to build the C295W in India with Tata is advancing. The part of the field evaluation trials we were involved in is over.


Tell us about the growth of your defence business in India?

‘Make in India’ is at the heart of our business strategy and you will see that our engagement with India goes beyond just sales. There is a lot of engagement on the industrial level. On the defence side, in particular, we are offering the C295W as a replacement for the Avro aircraft. As I just said, the proposal is advancing as per the DPP. Together with Tata, the programme holds out the promise of creating a world-class private sector aircraft manufacturing capability in India within an ambitious time-frame, and nurturing a widened supplier base with an increasingly skilled workforce.

I have already touched upon the partnership with Mahindra Defence to produce military helicopters in India. To add to that, even before we have a contract from the government, we have started working with Mahindra on an industrial level. Last year, we awarded a contract to Mahindra Aerostructures to make airframe parts for the Panther. These parts will be produced at the Mahindra facility in Bengaluru. They will be shipped to the Airbus Helicopter production line in Marignane, France, where they will be integrated with the rest of the airframe assembly and will form a critical part of the Panthers sold worldwide.


What is the status of the Coast Guard competition for 14 twin-engine Heavy Helicopters and are you are offering a MRO for the EC725 as part of the offer?

The EC725, now marketed globally as the H225M, has been selected by the Indian Coast Guard, and we are in the final contract stage with the customer. Yes, as part of our offer, a MRO facility to structure the Performance Based Logistics support package for these helicopters is proposed in Goa. All 14 EC725 will be re-assembled and flight-tested there. It is going to be a green-field project. The facility will include intermediate and depot level maintenance.


What happened to the mid-air tanker deal?

The outstanding RFP for the acquisition was withdrawn by the Ministry of Defence last year. We have no new information.


Are you on track to achieving a target of over $2 billion worth of procurement in India till 2020 covering both civil as well as defence?

We crossed $500 million in annual procurement from India in 2015 and had given the guidance of exceeding $2 billion in cumulative procurement in the next five years up to 2020. I can say that we are well poised to beat our own expectations.


You said last year Airbus’ investments into India could exceed 5,000 crore. How much of that has fructified so far?

The figure refers to potential investments across all the defence ‘Make in India’ and industrialisation programmes we are pursuing along with our partners in India.

How much of it fructifies depends on the programmes we receive from the Indian government. As I mentioned in my earlier responses, a number of proposals are in the pipeline. But these are not the only investments.


How do you read the several policy announcements made by the government in boosting manufacturing in defence?

What has been done is to lay the groundwork.

What is needed now is for the government to award a few large scale contracts to jumpstart Foreign Direct Investment (FDI) and manufacturing activity as part of ‘Make in India’ in the aerospace and defence sector.

 thehindubusinessline