India Plans to Build Passenger Aircraft: WSJ

Updated July 10, 2013, 6:42 a.m. ET

By SANTANU CHOUDHURY
The Wall Street Journal

NEW DELHI—India's ambition to build its own passenger planes received a boost after the government gave the go-ahead for a project to develop initially a 70-100 seat aircraft.

The plan, approved at a high-level committee meeting on manufacturing headed by Prime Minister Manmohan Singh and comprising ministers and government officials, will include the setting up of a special company that would use the design skills of the National Aerospace Laboratories, Hindustan Aeronautics Ltd. and other state-run organizations.

"This [the civilian passenger aircraft industry] is a strategic sector where there is a need to have a presence in the long term, particularly in view of the rapid growth of our aviation sector," a statement issued late Tuesday by the Prime Minister's office said, adding that a group headed by V. Krishnamurthy, chairman of the National Manufacturing Competitiveness Council would work out the modalities of this program.

The statement didn't include details on cost, the purposes of the plane, or if there are plans to build more types of passenger planes in the future.

The Indian government will consider partnerships with private companies in the country, as well as overseas ones for the development and production of the plane, the statement said.

Offsets in India's defense sector would also be leveraged to build high-precision equipment and avionics for the passenger aircraft project. Under the Indian government's so-called offset policy, companies that received Indian defense contracts exceeding 3.0 billion rupees ($50 million) need to either locally manufacture the products or parts worth 30% of the contract's value, or make an equivalent investment in the country.

Foreign aerospace and defense companies such as Boeing Co. and Lockheed Martin Corp. of the U.S., Russia's United Aircraft Corp. and Dassault Aviation SA of France have received defense contracts from India. Boeing, Airbus and Bombardier Inc. have also sold passenger planes to Indian carriers.

India—which has one of the world's most active space programs—is still to develop its own passenger plane. The country's first experience with a civilian aircraft is the Saras turboprop multi-role light transport plane that has been developed by the National Aerospace Laboratories.

Prototypes of the Saras are still being tested before the aircraft is certified for commercial use.

In one of the significant government-private partnerships, Mahindra Aerospace Pvt., part of India's diversified Mahindra Group,  has developed a five-seat light utility aircraft with National Aerospace Laboratories and GippsAero, the Australia unit of Mahindra Aerospace.

The development of a midsize passenger plane would allow India to extensively connect its smaller towns and cities to the major metropolis. It will also allow India to earn valuable foreign exchange from exports.

Source:  http://online.wsj.com