Axis Aerospace & Technologies, a vertically-integrated aerospace and defence company in the private sector, has been steadily growing its presence in this high growth sector which is expected to see a flood of offset projects coming into India in the near future. The company acquired Cades during late 2009 and has been growing their presence in the international market. Axis considers Russian origin equipment as the most dominant force in Indian defence and presumes that it would continue that way for the next couple of decades. Also, Axis understood that in order to work with Russian-origin aircraft, land and marine system strong cooperation with Russian OEMs are a must. In a conversation with Raghuvir Badrinath, Axis’ chairman & CEO S Ravinarayanan spoke on the importance of this and how the Indian players can effectively leverage the emerging opportunities.
The 9th edition of the Aero Show is just a day away and there is lot of buzz as we are in the final stages of global majors bidding for multi-billion dollar contracts from the Indian government. How will the ensuing Aero India 2011 pan out?
There are two main elements. First, over $36 billion worth of aerospace programmes are in their last stages of finalisation and are expected to be awarded in the next 18 months, including the MMMRCA (Medium Multi-Role Combat Aircraft), RSH (Reconnaissance and Surveillance Helicopter), FRA (Fuel Refilling Aircraft) and Mirage 2000 upgrades, definitely between this and next the Aero India. This is the great opportunity for global majors and Indian vendors to connect before the final decision. Second, this is the first major aerospace and defence event happening in India after the path-breaking DPP (Defence Procurement Procedure) 2011. The new version of DPP was announced on January 3 and this allows civilian aerospace activities as offsetable. This would widen the catchment area for OEMs and act as catalyst to increase the opportunities for Indian vendors. This is the right time for the vendors to showcase their abilities.
The Indian Offset Policy was recently tweaked. How do you think this will serve as platform for the Indian vendors?
The Ministry of Defence, Government of India has been engaged in bringing about a dynamic, transparent and a forward looking policy for a vibrant and progressive nation, but with a challenge to bring about changes that truly satisfies all stake holders. The recent changes in Offset policy addresses quite a few concerns from the previous Offset policy with an open approach to expand the scope of discharge of offset obligations, displaying seriousness and genuine intent of strengthening the indigenous industry. India today has a fairly matured civil aviation industry. The areas identified by the MoD such as airframes, engines, design engineering, raw material and semi finished goods, flying training institutions etc. in the changed offset policy, will complement the requirement of our Defence forces. What is needed is clarity on offset banking. Still it is vague on duration, banking process, transferability between OEM and its sister company or its group company. An urgent clarity on this would expedite and motivate all bidding OEMs to work with Indian vendors without waiting for the decision day.
Majority of armoury in the Indian skies is of Russian-origin. What is the way forward for Indo-Russian cooperation in the aerospace industry?
As you are aware, aerospace systems have always been the centrepiece of defence cooperation, between Russia and India. With our focus and investments in Russian market, we are in the final stages of forging long term strategic relations which will focus on creating cutting edge technology for aerospace and defence applications in addition to design, production and integration of aerospace systems including avionics.
You may be aware of some major Indo-Russian initiatives like joint development of the Fifth Generation Fighter Aircraft (FGFA) programme, development programme for the Military Transport Aircraft (MTA) which is planned to enter service with the air forces of both countries in future. Sukhoi -30 and MiG-29 would continue to be the nucleus of our air force. These require Indian development support and life cycle support. DPP 2011 has opened up these activities to the private sector. I am personally amazed at the development in Russian technology in the field of nanotechnology and aero structural materials. The challenge is cut through the language and cultural barriers to provide a better ownership cost of Russian equipment for the Indian defence. That is what we intend to do with the help of our partners.
In specific context to Axis, how are you aligning with the Russians to leverage this marketplace?
Axis has secured permission from Rosoboron the Russian Defence nodal agency to set up a joint venture with Avionica, a consortium of avionics and testing companies in Russia. An MoU to this effect would be signed on February 9 during the aeroshow between Rosoboron, Avionica and Axis. This JV is poised to become the first choice partner to various upgrade programmes including those for Su-30, MiG-29, Mi-17 and new programmes.
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This JV would also focus on setting up a centre of excellence for establishing MIPS-based electronic development for Airforce, Marine and Land systems. MIPS would be positioned as an alternative to standard micro-processors currently used in Mission systems. There are growing feelings in Indian defence that we should have indigenous custom architectured MALET solutions (Marine, Air and Land Electronics) as opposed to using standard off the shelf microprocessors and this CoE would work towards bringing Russian Technology, Domain Expertise and product knowledge into the custom chips. Along with this a nano-operating System would be developed.
Avionics Display systems is another growth area. To penetrate this, Axis is now very closely working with Ramanovskoe design, Russia for manufacturing of avionics equipment for MIG-35, SU-30, MIG-29, MI-17, MI-28, Kamov-28 among others.
In aerospace engineering, Axis will partner Progresstech Dubna for joint development and programme management of global aerospace projects for civilian and military aircraft programs. This would target various programs of Russian and European origin for both India and exports. Progresstech Dubna has been involved in the design of various Russian and European Aircraft.