Boeing flags inexperience of private sector “strategic partners” - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Thursday 7 September 2017

Boeing flags inexperience of private sector “strategic partners”

Boeing says global experience demands public-private partnership to leverage experience of public sector

By Ajai Shukla
Business Standard, 8th Sept 17

In New Delhi on Thursday, the world’s largest aerospace corporation, The Boeing Company, openly expressed what many global arms vendors have complained about in private: The Indian private sector is not yet capable of manufacturing complex military aircraft under transfer of technology (ToT).

Pratyush Kumar, Boeing’s India chief, proposed that highly experience defence public sector undertakings (DPSUs) – like Hindustan Aeronautics Ltd (HAL) – be coopted, since that is where aerospace expertise and experience lies in India.

Speaking “from the vantage point of a company that has been in aerospace industry for 100 years, across the world”, Kumar in effect proposed a major reorientation of the defence ministry’s new Strategic Partner (SP) policy.

The SP policy aims at creating capable defence manufacturers in the private sector, to compete with the DPSUs and Ordnance Factories (OFs) that have historically dominated defence manufacture in India. The SP policy requires private firms chosen as SPs to enter technology partnerships with nominated global “original equipment manufacturers” (OEMs), and jointly bid for contracts to build aircraft, helicopters, submarines and armoured vehicles for the Indian military.

But Kumar, speaking at a seminar organized by the Centre for Air Power Studies, the air force’s think tank, pointed out that successful examples of ToT-based manufacture all involved “co-opting of public enterprise and private enterprise in a way that leveraged the investment made in the public enterprise for multiple decades”.

The Boeing chief says he “tried hard, and could not find a single example [of successfully building an aircraft under ToT] where it was just the brand new private enterprise with limited aerospace experience. Look at Turkey, look at Japan, look at Brazil - look at multiple countries. In all cases there is a fine balancing act of co-opting the capabilities of both public and private enterprise.”

Other foreign companies are less forthright than Boeing. With two multi-billion dollar aircraft acquisitions already launched via the SP route – for single-engine fighter aircraft and helicopters – foreign OEMs have begun partnering Indian private firms. Lockheed Martin has partnered Tata Advanced Systems Ltd (TASL); and Saab has partnered the Adani Group anticipating a tender for the single-engine fighter.

This although TASL has never assembled an aircraft, while the Adanis have never built a single aerospace component. Foreign OEMs resent having to partner novices, but comply quietly so as not to rock the boat, says a foreign executive based in India.

Boeing is more forthright, bolstered by the confidence of being the most successful arms vendor in India over the last decade. Since 2009, Boeing has sold India aircraft worth $12 billion. These include eight P-8I maritime aircraft in 2009, and then four in a follow-up order; ten C-17 Globemaster III heavy lift aircraft in 2011; and 15 Chinook CH-47F and 22 Apache AH-64E helicopters in 2015.

While these were all sales of ready-built aircraft, Boeing is perhaps anticipating having to “Make in India” with an SP in another forthcoming contract– the navy’s multi-billion dollar acquisition of 57 ship-borne fighters for its aircraft carriers. In that acquisition, for which a tender is awaited, Boeing’s F/A-18E/F Super Hornet would possibly compete with Dassault’s Rafale-Marine; Saab’s Sea Gripen and an upgraded version of the Russian MiG-29K/KUB.

Aspiring Indian SPs, like TASL, admit that their role in an SP contract would remain “build to print”, i.e. manufacturing sub-assemblies and assemblies to blueprints provided by the OEM. Yet, it would provide a lucrative growth opportunity.

“The need of the hour is for the ministry of defence to go forward with the two very large aerospace orders [for] single engine fighter and helicopters. Frankly, in my mind, there is nothing else to it”, said TASL chief, Sukaran Singh, at the same seminar.

In contrast, HAL chief T Suvarna Raju talked up his engineers’ design skills and experience. Pointing to the range of helicopters HAL has designed ground-up – the Dhruv advanced light helicopter, Rudra armed helicopter, and the eponymous Light Combat Helicopter and Light Utility Helicopter – Raju declared: “Each component of our helicopters demonstrates the skill sets of HAL designers, of their capabilities and innovation efforts. Look at the carbon composite blades and the transmission system, composite body structure, glass cockpit and many more…”

The air force, however, continues to back the SP policy. “The only way to sustain the momentum in the aerospace manufacturing space is to start manufacturing here and strategic partnership model is a step in [that] direction”, said Air Marshal Shirish Deo, the air force’s vice chief.

The SP policy has been in the making since 2014-15. It remains contested and a work in progress.


  1. Sounds like sour grapes to me. With LM, Saab, Dassault and Mig/Su all having Indian partners Boeing was the only one without. They should have firmed up before others but I guess they became a bit complacent after lapping up lots of orders.
    Anyways SP model is here to stay. I don't think there will be a change not at least till 2019.they have to adapt or let France will the IN order.

  2. This is true to a large extent . Only TATAs have some experience in. Aviation.
    There are others who have benefitted as component suppliers from Tejas and ALH. Maybe most are public sector units.
    The 56 plane C-295 should ensure suppliers base improves. It is a step by step process .

  3. Why are we not making more LCAs ?

    And why is no one asking this question??

    Isn't buying LCA better than buying a gripen E, which is also an unproven version, with a GE 414 engine... Isn't it better to get this engine for LCA instead? And buying a 40 year old design F 16 is just not worth it... Though its a beautiful aircraft.... Why is no other country buying them... And we are?

    Make in India was just a slogan with the same modus operendi of making election funds...

    Its disgusting how the ruling party fools the public... Before and after elections...selling dreams before and doing exactly the opposite (time and again)

    All political parties are the same, election time is near, let's see what dreams they sell now??

    When will our ruling elite start thinking for the good of the country??
    Such a shame!!!

  4. mig 35 should be considered, HAL can build it. Adani and TATA dont have any experience making complex stuff.

  5. We need to learn from china. No one will share their hard earned technology with anyone.
    Look at what HAL has achieved in helicopters , what IGMDP did to our missile technology.We need to do the same for fighters.
    Build Tejas put a couple of squadrons in place , improve iteration by iteration.
    We need to do the same with Kaveri . Start using it in ground and ship based power generation. Improve its reliability.

  6. for people batting for LCA - please tell me when is the FOC of LCA mark 1? and when was it supposed to have been completed?
    what is the timeplan for mk2 if there is one? its good to talk about LCA but the main problem is the rate at which they make and time they take for development.


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