India to get $10b aviation offshore business

Bangalore: The Central government's offset policy is expected to bring aviation offshoring deals worth over $10 billion to the country in the next couple of years. The government has already committed to acquire commercial and defence aviation products, aircraft, components, services and equipment worth $40 billion, with an offset component ranging from 30% to 50%.
Under the offset policy, the government holds back a minimum 30% of the invoice value of any civil or defence aviation related purchase over a mutually agreed period of time, till the seller outsources services equivalent to that of the offset share. The policy is aimed at helping to build an eco-system to support the growth and upkeep of the industry.
Some of the deals cleared include: 68 aircraft from Boeing for Air-India at $6.7 billion (with an offset share of 30%), 43 aircraft from Airbus for Indian at $2.7 billion (40%), 200 helicopters from Eurocopter for defence at around $20 billion (50%), and 126 MRCA (multi-role combat aircraft) from multiple vendors for defence at $10 billion (50%).
The major chunk of these offshoring deals are expected to land in Bangalore. Currently, no other location in the country has a comparable aviation ecosystem.
The aviation engineering business alone is expected to be over $4 billion by 2020. The space will include developing sub systems, intelligence for landing gear, structural body frames for aircraft, interiors, cockpit, and entertainment systems.
09/08/07 Mini Joseph Tejaswi & Anshul Dhamija/Times of India

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Categories: Foreign Aug 2007, General Aviation Aug 2007