Secretary Civil Aviation addresses IACC’s Indo-US Economic Summit

Following is the text of the speech of Secretary, Civil Aviation, Shri M. Madhavan Nambiar while addressing the session on Civil Aviation and Aerospace of the Indo-American Chamber of Commerce (IACC)’s 5th Indo-US Economic Summit :
“I am indeed extremely happy to be here this morning at the Indo US Summit. The topic looking ahead consolidating alliances is specially relevant for the civil aviation sector where for the past five years there has been positive and intense engagement between US and India resulting in taking up of long term projects.
The Partnership:
The civil aviation sector is one of the fastest growing areas of Indo-US technology and economic engagement. The spurt in the growth of the civil aviation market in India has attracted high-level interest of the Government and the Industry of the USA. The Government of India and the Indian Industry seeks technical, human resource, high technology and commercial support from the USA in its efforts to modernize the civil aviation industry in India and to meet the challenges of its rapid expansion in terms of safety, customer demands, technology and communication support and air space management. Following the Open Skies Agreement between the countries in 2005, there has been a steady increase of air traffic between the two countries stimulating economic partnership and strengthening people to people contacts. Leading US aviation companies have establishment presence in India with a long-term strategy.
Partnership scope in the aerospace industry
The American aerospace industry has been the leader in the world for a long time. The total sales recorded by the US aerospace industry in 2008 was to the tune of USD 204 billion, which was a new record for the fifth straight year. It also represented the 7th year of growth in the last eight years. In terms of foreign trade, the industry exported products worth USD 99 billion, while importing products worth USD 38 billion. The aerospace industry in US has the largest positive foreign trade balance of any US manufacturing sector. In terms of employment, the industry provides more than 2 million middleclass jobs. The expected sales of the industry in 2009 is expected to be around USD 214 billion, an increase of 4.8 per cent.
Compared to this, the Indian aerospace industry is still at a nascent stage of growth. In terms of civilian aircraft manufacturing, HAL has a civilian version of the advanced light helicopter, which has been received well. We have a long way to go in the development of the aerospace industry in the country and American help may be very useful. The conclusion of Bilateral Aviation Safety Agreement between India and US will also help the process of developing the aerospace industry in India. The Ministry of Civil Aviation is pursuing the conclusion of BASA with FAA in the right earnest and it is expected that this agreement will be in place by 2010.

India with its strength in the IT sector can play a vital role in the IT segment of the aerospace industry. India’s greater involvement in this segment will create a win-win situation for the American and the Indian companies.

Business opportunities in the aerospace sector
As all of you are aware, the Indian civil aviation industry has registered remarkable growth in the last 3 to 4 years. Though there has been some slow down in the recent past, firstly due to the unprecedented increase in the oil prices and thereafter due to the economic slow down, we remain confident of double-digit growth of this sector in the long term.
Several American companies have benefited from this growth and at the same time have contributed to this growth. The order books of Boeing for aircraft sales in India has been very impressive. The aircraft sales are not only confined to the national carrier Air India but even the private carriers have a long order list of Boeing aircraft. Similarly, the engine manufacturers like GE and Pratt and Whitney too have a strong presence in India. In the field of general aviation, the Bell helicopter and aircraft like Beechcraft are popular and their order books are also soaring.

Unfortunately, in the airport sector the American interest has been somewhat lagging. As you are aware, as per Government policy 100% FDI is permitted in the airport sector through the automatic route. With such favourable investment regime, you would expect the American airport industry too to come forward and partner in the growth of this sector.

The offset provision in the Air India’s Boeing fleet acquisition has thrown up immense possibility for the American partnership in the development of the aerospace industry in India. With the offset provision of around USD 2.5 billion, it is expected that the aerospace industry in India will get the required boost to come to the world stage.

India-US Joint Aviation Steering Committee:
In order to take the India-US partnership forward, an India-US Joint Aviation Steering Committee has been set up to further the objectives of the bilateral Aviation Cooperation programme. The first meeting of the Steering Committee was held in October, 2007. The US-India Joint Aviation Steering Committee has set up Working Groups on Air Worthiness, Flight Standards and Airports and Environment.

Human resource and technical training collaboration:
The FAA has chalked out Phase II and Phase III of the Cooperation Programme. During Phase II, Managers and Executives from the Indian side, (DGCA and the AAI) visited USA in May 2008 to observe and understand how FAA and US Airlines address some of the air traffic control issues which India currently faces.

In summary, the last couple of years has resulted in a better understanding of each others strengths and potential laying the foundation for development of both the countries working together to make skies more safe and friendly. In this we would have to work together to increase technical collaboration for joint training programmes for capacity building and manpower development, develop industrial practices in safety and surveillance standards as well as look at long-term collaborative projects and manufacturing and investment. I am quite sure that his summit will focus on several of these issues and develop the road map for implementation. I wish this summit all success.”
07/01/09 Press Information Bureau

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Categories: Indian Aviation- In General Jan 2009