While Boeing is interested in selling airplanes to India, its overall goal is to make a global partner out of India. “This integrated enterprise strategy is what differentiates Boeing from its rivals,” says Ian Thomas, head of Boeing India. The US aerospace giant is also investing millions to expand India’s R&D capability, civil aviation infrastructure and hi-tech manufacturing base.
At one level, Boeing is certainly still interested in selling its products to clients in India. Boeing has sold $ 25 billion worth of civilian aircraft ranging from Air India airliners to three business jets designed to serve as “the Indian equivalent of Air Force One.” The future holds even more promise: Boeing estimates India will buy 911 aircraft worth $ 86 billion over the next 20 years. Then there is the potential for military sales. Besides the F-18 Super Hornet fighter, Boeing also has its P-3C Orion reconnaissance aircraft, Chinook CH-47 helicopter and Apache attack helicopter to offer. “If Boeing in India was only about lots of airplanes and big dollars,” says Thomas, “It would make a short story.”
At another level, Boeing is investing heavily in broadening India’s capability.
In infrastructure, Boeing has invested in a $ 100 million maintenance center in Nagpur, the emerging intermodal transport hub for the country. The firm is helping Air India set up a $ 75 million engineer and pilot training facility in Mumbai. “The facility will train personnel beyond Air India’s needs,” says Thomas.
In hi-level manufacturing, Boeing is encouraging Indian firms to “step into the aerospace industry and join the Boeing supply chain.” One $ 500 million deal has Tata Steel contracted to provide titanium floor beams for the Dreamliner.
A more long-term arrangement is the company’s recent 10-year, $ 1 billion MoU with Hindustan Aeronautics Limited.
While some of this subcontracting is a consequence of the offset obligations Boeing has earned from its sales to Air India, what Boeing is doing goes “far beyond its offset obligations,” says Thomas. For example, his firm is also having Indian firms make defence components even though “Boeing has accrued no defence offset requirements, as it has made no defence sales in India.”
At a third level, Boeing is developing a R&D partnership with India’s scientific establishment. It now has a remarkable array of technology partners in India ranging from the Indian Institute of Science and the Council of Scientific and Industrial Research to Wipro and HCL.
In January, many of these entities joined Boeing’s Aerospace Network Research Consortium, the first public-private partnership in aerospace technology. Boeing’s R&D relationship with the Indian Institute of Science exists with only eight other institutions around the world, and is only one of the two it has overseas.
Thomas says Boeing is trying to tap into the “tools, technology and talent” in India with the goal of making India more than just a market but also a “global partner” of Boeing. Amid all this, Boeing is increasing its own IT and BPO operations in India.
“In the Boeing 777, there were 400 software applications. In the 787, there are 1200 software applications,” notes Thomas. As airplanes become increasing e-enabled, he notes, there is ever more opportunity for what India does well: “Manage data and turn it into knowledge.”