Tuesday, October 31, 2006

Aerospace deals buoy IT firms

Mumbai: The offset policy of the government of India has opened up a huge opportunity for domestic companies that offer design, engineering and software services to the aerospace sector. The policy entails that any order by a defence entity or state-owned civilian carrier to a foreign supplier of Rs 300 crore or more will have to ensure an offset (reinvestment) of at least 30 per cent of the order through procurement of components and services from India. Given that the deals, those cleared and still in the pipeline, amount to $20 billion – most of them for defence and civilian aircraft orders – a 30 per cent business opportunity translates to over $6 billion.
Industry sources say the State Trading Corporation (STC), official authority for monitoring or controlling the offset activity, has received 15-20 applications from Indian companies for registration. Major IT companies like TCS, Satyam, Infosys, HCL, Wipro and PSUs like Hindustan Aeronautics Ltd. (HAL), Bharat Electroncis Ltd. (BEL) and some niche knowledge-based engineering companies like Taneja Aerospace, Triveni High-tech, CADES and the Maini group besides majors like L&T, Godrej, the Tatas and Kirloskars are in the queue to get a chunk of the offset orders.
31/10/06 Bibhu Ranjan Mishra/Business Standard
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