$25bn defence output by 2025: PM at C-295 facility

Prime Minister Narendra Modi on Sunday made a strong pitch to global manufacturers, saying that the country is moving forward with the mantra of ‘Make in India, Make for the World’

Prime Minister Narendra Modi on Sunday made a strong pitch to global manufacturers, saying that the country is moving forward with the mantra of ‘Make in India, Make for the World’.

Prime Minister Narendra Modi in Vadodara on Sunday. (PTI)

The country is on its way to becoming a global hub for the manufacture of transport aircraft, the Prime Minister said after laying the foundation stone of a manufacturing facility being set up by the Tata-Airbus consortium in Vadodara for C-295 medium transport aircraft for the Indian Air Force’s transport fleet.

“We have taken a big step in the direction of making India the manufacturing hub of the world,” he said.

The Prime Minister said that India aims to scale up its defence manufacturing output to more than $25 billion by 2025. Of this, more than $5 billion will be for exports, he said, adding that the defence corridors being developed in Uttar Pradesh and Tamil Nadu will immensely help in scaling up this sector.

The C-295 aircraft manufacturing facility will be the first such facility in the private sector in the country.

“Now following ‘Sabka Prayas’, the government has started giving equal importance to the public and private sector... we have abandoned the makeshift approach of decision making and have come up with various new incentives for investors. Today our policies are stable, predictable and futuristic,” the Prime Minister said.

In September last year, the defence ministry signed a ₹21,935-crore contract with Airbus Defence and Space for 56 C-295 planes to give push to the government’s Atmanirbhar Bharat Abhiyan. Tata Advanced Systems Limited (TASL), and Airbus Defence and Space will jointly execute the programme.

Under the contract, the country will get 16 C-295 aircraft which will be delivered by Airbus in flyaway condition from Seville, Spain, and the remaining 40 will be manufactured in India by Tata consortium of TASL and Tata Consultancy Services.

The 16 flyaway aircraft are scheduled to be delivered between September 2023 and August 2025, while the first Made in India aircraft will roll out of the new facility in September 2026 and the remaining 39 by August 2030.

“India presents opportunities of low-cost manufacturing and high output,” Modi said after the ceremony. The C-295s will replace IAF’s fleet of ageing Avro-748 planes that entered service in the early 1960s.

“India is making fighter jets, tanks, submarines, medicines, vaccines, electronic gadgets, mobile phones and cars that are popular in many countries. India is moving forward with the mantra of ‘Make in India, Make for the World’ and now India is becoming a huge manufacturer of transport aircraft in the world. I can foresee that India will soon be manufacturing big passenger aircraft that will proudly bear the words Made in India,” the Prime Minister said.

The Prime Minister said the C-295 manufacturing facility had the power to transform the country’s defence and aerospace sector.

“Transport aircraft, manufactured at the facility, will not only strengthen the armed forces but also help in developing a new ecosystem of aircraft manufacturing in the country,” the Prime Minister said.

Apart from the 56 planes already ordered, the C-295 facility at Vadodara will be capable of meeting additional requirements of the air force and also cater to export orders, HT has learnt.

“The project offers a unique opportunity for the Indian private sector to enter into technology intensive and highly competitive aviation industry. It will augment domestic aviation manufacturing resulting in reduced import dependence and expected increase in exports,” the defence ministry said in a statement on Sunday.

The project is expected to give a boost to India’s aerospace ecosystem and generate thousands of jobs.

“Vadodara, which is famous as a cultural and education centre, will develop a new identity as an aviation sector hub,” the Prime Minister said in his home state of Gujarat. Elections are due in the state towards the end of the year.

The Tata consortium has identified 125 domestic Ministry of Micro, Small and Medium Enterprises (MSME) suppliers spread across seven states. This will act as a catalyst for employment generation and is expected to generate 600 highly skilled jobs directly, over 3,000 indirect jobs and an additional 3,000 medium skill employment opportunities, officials in the defence ministry said.

Manufacturing of more than 13,400 parts, 4,600 sub-assemblies and all major component assemblies will be carried out in the country, while some equipment such as engines, landing gear and avionics will be provided by Airbus Defence and Space, and integrated on the aircraft by the Tata consortium, the officials said.

All 56 aircraft will be fitted with indigenous electronic warfare suite developed by Bharat Electronics Ltd and Bharat Dynamics Limited. After completion of delivery of 56 aircraft to IAF, Airbus Defence and Space will be allowed to sell the aircraft manufactured in India to civil operators and export to countries which are cleared by New Delhi, the defence ministry said.

At the ceremony on Sunday, the Prime Minister said, “The UDAN (Ude Desh ka Aam Nagrik) scheme has also given our aviation sector a major boost. India will require over 2,000 aircraft in the next 15 years or so. Today, we have taken a step towards meeting this global demand. New India focuses on a competitive environment while ensuring quality in the production sector.”

Highlighting the investment friendly policies of the government, the Prime Minister remarked that its benefits are clearly visible in the foreign direct investment (FDI) inflows.

“In the last eight years companies from more than 160 countries have invested in India. These foreign investments are not limited to certain industries but are spread across 61 sectors and covers 31 states of India. More than $3 billion have been invested in the aerospace sector alone. Post 2014, investment in the aerospace sector saw fivefold rise as compared to the total investment in 14 years previous from 2000 to 2014,” he said.

“A new saga of economic reforms is being written in India today and the manufacturing sector is reaping the most benefits from this apart from the states,” he said.

The Avro replacement project has been in the works for more than a decade. The defence acquisition council – India’s apex defence procurement body – gave its acceptance of necessity (AoN) to replace the Avro planes with 56 new aircraft in 2012. Under India’s defence procurement rules, AoN by the council is the first step towards buying military hardware.

It is the first Make in India aerospace programme in the private sector involving the full development of a complete industrial ecosystem; from manufacture to assembly, test and qualification, to delivery and maintenance of the complete lifecycle of the aircraft, Airbus Defence and Space and TASL had earlier said in a joint statement.