Tata Aerospace & Defence ushers in a new era for defence business in India. Atul Chandra decodes what it means for the group and the industry
Picture a scene from a battlefield of the future, where the Indian armed forces are in combat.
Indian army soldiers could be air-dropped from C-295 aircraft. The Wheeled Armoured Amphibious Platform (WHAP) could be the vehicle of choice to insert soldiers (protected by high-quality light-weight bullet proof jackets) into a hot combat zone. Artillery support could be provided by the Advanced Towed Artillery Gun System (ATAGS) 155mm/52 cal howitzer and Pinaka Multi-Barrel Rocket Launcher (MBRL) systems, which can fire 12 rockets in a single salvo.
Intelligence on the location, strength and composition of enemy formations could be provided by a variety of unmanned aerial systems. During battle — irrespective of bad weather or low light — the soldiers could have recourse to the latest Night Vision Devices, Electronic Warfare systems and Perimeter Surveillance systems that allow detection of enemy troops at longer distances. All these components could be tied together by a next generation Battlefield Management System designed for tactical land forces to reduce the ‘Fog of War’.
F-16 fighter aircraft and AH-64 Apache attack helicopters could provide air superiority over the battlefield, while warships using Surface Surveillance Radars (SSR) and 3D Air Surveillance Radars could play a key role in blockading enemy routes.
What is common to all of these is that they could have either been made in India by the Tatas or feature a significant aerostructure/system supplied by the company’s latest entity — Tata Aerospace & Defence (Tata A&D).
After decades of supporting the creation of a credible ‘Made in India’ backbone for the Indian armed forces, the Tata group is now consolidating its businesses across aerospace and defence sectors under one umbrella — an ambitious play to emerge as the largest player in India’s private sector defence industry. This will enable the Tatas to better target the immense procurement opportunities provided by the nation’s need to modernise the armed and paramilitary forces.
“The formation of Tata A&D, a single unified entity, will allow us to better target emerging opportunities in aerospace and defence, and engage holistically with customers both in India and globally,” says N Chandrasekaran, Chairman, Tata Sons.
Tata A&D will bring together the group’s individual defence businesses to form a powerhouse with over 6,000 employees, and production facilities in the states of Telangana, Karnataka, Jharkhand, and Maharashtra.
“We have moved beyond providing individual products to developing integrated offerings across Land Mobility, Airborne Platforms and Systems, as well as Weapons Systems and C4I,” says Banmali Agrawala, president, infrastructure and defence & aerospace, Tata Sons. “Tata A&D, when formed, will be better equipped to execute larger and more complex projects and be more competitive.”
Given India’s geopolitical situation, the Indian armed forces have to be prepared at all times for conflict with nuclear armed adversaries. However, according to a recent presentation to the Parliamentary Standing Committee on Defence about the equipment available with the Indian Army, 8 percent is ‘state-of-the-art’, 24 percent ‘current’ technology and 68 percent ‘vintage’. The ideal ratio for a modern army is one-third each in the ‘state-of-the-art’, ‘current’ and ‘vintage’ categories.
As a developing country with a large population, India faces significant budgetary constraints and every defence rupee must be stretched as far as possible. It is for this reason that the development of a homegrown defence industry, which can develop defence hardware not only for sale in India but also export, is vital. To foster the growth of the indigenous defence industry, the Ministry of Defence (MoD) has come up with the Strategic Partnership model, allowing a foreign firm to partner with an Indian company to manufacture larger platforms like aircraft, submarines, ships, and tanks in India, with greater value addition from within the country than in the past.
It is also vital in such a case that the Indian companies selected for this have the scale, skill, experience and nationalistic drive to make the necessary investments with support from the government. The Tata group’s extensive manufacturing and industrial experience brings much-needed economies of scale and efficiency to defence production in addition to a well-acknowledged ability to meet the Indian armed forces’ stringent requirements within timelines.
Mr Agrawala adds, “In India, Tata has built an industrial base in defence designed to complement and integrate with the efforts of the Defence Research & Development Organization (DRDO) and Defence Public Sector Units (DPSU).”
Tata A&D is now in the process of obtaining statutory and regulatory approvals for the combined entity. Work on the consolidation, however, has not halted the group’s accumulation of new milestones.
Tata Boeing Aerospace Limited delivered its first AH-64 Apache combat helicopter fuselage ahead of schedule in June. The state-of-the-art 14,000 sqm facility in Hyderabad will be the sole global producer of fuselages for AH-64 Apache helicopters delivered by Boeing to any customer. This joint venture (JV), Boeing’s first equity JV in India, will also produce secondary structures and vertical spar boxes for the AH-64.
“Our partnership reflects a continued commitment to develop the aerospace and defence manufacturing ecosystem in India. The delivery of the fuselage within a year of the facility being operational is a huge boost to indigenous manufacturing. It also demonstrates our commitment to deliver high-quality products within a short span of time,” said Sukaran Singh, managing director and chief executive officer, Tata Advanced Systems Ltd. (TASL), the group entity which will unite Tata’s aerospace and defence business and be renamed Tata A&D.
The Tata group’s historic defence journey
WORLD WAR I
The crushing urgency of World War I and the shortage of materials and manpower in Europe meant that not only would another source of war supplies have to be found but the materials and equipment would have to be of the right quality and delivered in adequate quantities to make a difference in the battlefield. The solution, surprisingly, came from India.
“In no way has India been so great a surprise since the war began as in her ability to supply munitions and war equipment,” The Graphic reported in May 1918. The report (see image) headlined ‘India as a War Vulcan’ said, “In August 1914, when the fate of Europe hung in the balance, and the British were woefully short of guns and ammunition, India hurried to France hundreds of guns of the latest pattern, thousands of rifles and millions of rounds of ammunition.”
Noting that India had increased production of munitions and war equipment steadily during the course of the war, the report added, “Every theatre of war has benefitted from this Indian activity.”
These contributions were led by the Tatas. The Graphic called it a “a fascinating engineering romance.” “That highly gifted and patriotic Indian — the late Jamshetji N Tata — saw, years ago, the possibility of raising a mammoth iron and steel industry in India,” it said before documenting the great service that ‘the Tata Iron and Steel Works have rendered during the war.’
WORLD WAR II
When the next world war began, just two decades after WWI ended, Tata Steel pledged its entire output to the allied war effort.
Displaying exemplary ingenuity Tata Steel’s scientists produced 110 varieties of steel in only five years despite the hardships and shortages of war. Its other major achievements included the manufacture of 1,000 tonnes of armour plate per month from a mill setup in 1942 and the building of a benzol recovery plant in 1943 for producing toluene, which was used in producing explosives.
WWII also marked the start of the Tata group’s legacy of strategic partnerships with the Indian armed forces. A special plant of the Tata Engineering & Locomotive Company (TELCO) in Jamshedpur built an astounding 4,655 units of the Wheeled Armoured Carrier Indian Pattern or ACV-IP — popularly known as the Tatanagar — between 1940 and 1944. It played a prominent role as a forward observation and reconnaissance vehicle in the desert warfare in North Africa during WWII.
In the wake of the Kargil War in 1999, when India realised an urgent need for a massive quantity of bullet proof jackets for its armed forces, Tata Advanced Material Limited was the only Indian company that ‘fully met the technical specifications’ the army had spelt out.
Did you know?
The Indian Army alone has identified as many as 25 projects for Make in India, including the strategically important Future Infantry Combat Vehicle and Future Ready Combat Vehicle.
The international aerospace market has seen record growth over the last 10 years with jetliner sales to airlines at an all-time high and a recovering general and business aviation market. Keen for greater profits and a reliable source for their requirement for aerospace-grade components and aerostructures, global OEMs are increasingly turning to India as a location for sourcing of high-quality aerospace manufacturing.
Tata group companies are already global single source suppliers for major aerospace programmes. They also undertake structure assembly for the Boeing 777 and 777X, air-to-air refuelling pods assembly for Cobham and Pilatus PC-12 complete airframe assembly, in addition to manufacturing parts for several other major aerospace programmes. Tata A&D aims to seize emerging opportunities in these areas for other important aerospace programmes, to emerge as the Indian leader for aerospace manufacturing.
Pratyush Kumar, president, Boeing India, said “Our investments in technology, capability and skilling are clearly paying off as evident from the quality and speed at which this delivery milestone has been achieved. We see this as a major step towards future opportunities to pursue the co-development of integrated systems in aerospace and defence.”
Bringing new aerospace and defence technologies and manufacturing processes is also vital to the growth of the aerospace sector in India. A 4,700 sqm metal-to-metal bonding facility in Hyderabad was inaugurated in April by Tata Lockheed Martin Aerostructures (TLMAL), a JV between TASL and Lockheed Martin. This technology, introduced in India for the first time, will enable increased indigenisation across various manufacturing programmes for complex aero-structure manufacturing.
An important development here is that the Tata Sikorsky Aerospace, which used to import at least 2,000 empennage parts for the Indian C-130J manufacturing programmes, will now transition this to TLMAL for production in India. TLMAL built C-130 empennages have also been fitted on aircraft delivered to the Indian Air Force.
Tata A&D also has the distinction of being awarded the first ever MoD contract under the ‘Buy and Make (Indian)’ category — 31 Surface Surveillance Radars for the Indian Navy. The contract includes installation, integration and commissioning of the radar systems onboard the Indian Navy warships. In November 2017, the MoD awarded another contract to the Tatas under the ‘Buy and Make (Indian)' category to boost the Indian Navy’s underwater surveillance capability against asymmetric threats. The requirement for Portable Diver Detection Sonar (PDDS) is not only an urgent one, but also one of the largest in the world market.
India was the world’s largest importer of arms between 2013-17 with Saudi Arabia, Egypt, the United Arab Emirates and China completing the top 5. Together, they account for 35 percent of all arms imports. It is pertinent to note that over the 10-year period from 2008-17, India’s arms imports increased by 24 percent. Pakistan’s arms imports, meanwhile, decreased by 36 percent between 2008-17. ‘The tensions between India, on one side, and Pakistan and China, on the other, are fuelling India’s growing demand for major weapons, which it remains unable to produce itself,’ says Siemon Wezeman, senior researcher with the Stockholm International Peace Research Institute (SIPRI) Arms and Military Expenditure Programme.
The main beneficiary of increased arms sales to India is the United States (US), with an incredible 557 percent increase in arms exports between 2008-17. It is now the second largest supplier of weapons to India.
Russia still leads, accounting for 62 percent of India’s arms imports. Between 2013-17, India alone accounted for more than 1/3rd (35 percent) of all arms exports from Russia. The third largest supplier of arms to India is Israel, whose defence exports to India have increased by a whopping 285 percent between 2008-17.
China, by contrast, made substantial strides in defence exports between 2008-17, with a 38 percent increase. It has continued to reduce its dependency on weapons imports, reducing this by 19 percent for the same period.
Pakistan has been China’s largest defence market since 1991 and accounted for 35 percent of all Chinese defence exports between 2013-17. China now accounts for 2/3rd of Pakistan’s arms imports (2013-17); Pakistan's arms imports from the US also dropped by 76 percent in the same period.
Note: All data and figures from SIPRI
More than any other sector, it is aerospace and defence that call for a pioneering approach.
In aerospace, Tata-led businesses have already emerged as global single source suppliers for a number of important fixed wing and rotary wing programs, and this bodes well for future ambitions in this domain.
In the defence domain, the end of an arduous journey — from the development of component and systems level technology for defence equipment to the design, development and manufacture of complete platform solutions for use on land and in the air — is now in sight.
As a trusted partner to the MoD, armed forces and DRDO, Tata companies are playing an increasingly important role in defence programs of strategic importance.
The emergence of Tata A&D is an important new milestone in this journey. It signals not just the coming of age of the private sector industry in this sector but also the dawn of a credible indigenous defence manufacturing base.