India's private civil aerospace sector was born only in 2001, when the industry was deregulated, but today it looks like an increasingly robust child, although it is suffering from the common ailments of growing up in aerospace.

Leading the charge, Dynamatic Technologies of Bengaluru has built more than 1,000 shipsets of flap-track beams for the Airbus A320 family. The production volume is perhaps not its most impressive achievement, though. Since 2010, the company has been the sole suppler of the assemblies to Spirit AeroSystems (Europe) and Airbus.

Analysts also point to the potential of small and medium-sized Indian aerospace enterprises—some long-established suppliers of small components—that are now growing stronger.

But it is, after all, a young industry, facing the same types of problems that others have at a similar stage of development. More than anything else, technological expertise and achieving zero-defect targets are the most critical challenges faced by Indian companies, say consultants PwC. “India needs to keep pace with the increasingly high use of technology across the design life cycle,” PwC says. High capital costs and low production volumes are also a problem, and it can hardly help that technology is continually advancing (see page 55).

“What's holding back the sector seems to be the lack of people with the necessary skills,” says Ashok Saxena, a former managing director of state aircraft builder Hindustan Aeronautics Ltd. (HAL), who is now director of the U.K. advanced engineering office in India.

The private industry could not really blossom until 2001, before which regulation prevented private rivals to defense-oriented state firms such as HAL, although small suppliers had been permitted. But since then companies such as Dynamatic have grown. One of the latest to emerge is Mahindra Aerospace, offering complete aircraft, aerospace structural components and aircraft development services. The company is steadily developing a metallic aerostructures manufacturing capability through a combination of rented operational facilities and development of greenfield manufacturing plants.

The company activities stem from a 2007 agreement between conglomerate Mahindra and Mahindra, the National Aerospace Laboratories (NAL), Council of Scientific and Industrial Research and government for the design and development of a new general aviation aircraft. Something of a breakthrough, it was the first public-private joint venture in the aircraft design sector in India.

The acquisition of aerospace component manufacturer Aerostaff Australia and Australia-based aircraft manufacturer Gippsaero in 2010 gave Mahindra Aerospace an instant capability in manufacturing and an entry into the 2-20-seat aircraft segment. The company also bought the metallic airframe manufacturing equipment of Boeing Aerostructures Australia.

Mahindra says it has established an excellent relationship with aircraft builders. “Over time, our teams have moved up the value chain from providing design support to taking on responsibility for design packages, and are now getting into certification aspects for the original equipment manufacturers,” says Anand Mahindra, chairman and managing director. “On the general aviation side of the business, we have already committed our efforts to developing and marketing a portfolio of light aircraft in the 2-20-seat range.” The joint development with NAL, the NM5, is one initiative in that area.

Anand Mahindra also says the group is looking for opportunities in “the next higher class of civilian aircraft, regional transports.” India is close to launching a regional turboprop airliner (AW&ST July 22, p. 54).

“Over the next decades, India undoubtedly has the potential to become a significant part of the global aerospace supply chain,” says Vivek Lall, president and CEO of Reliance Aerospace Technologies, part of India's largest private-sector enterprise, Reliance Industries. “Indeed, there has been a remarkable growth of this sector, as a large number of private players have entered it.”

Lall notes that “OEMs are not only farming out a big chunk of machined and sheet-metal parts production, but also expecting vendors to supply large aircraft subassemblies and even design expertise.”

According to the Center for Aviation, Boeing will bring more than $1 billion of aerospace manufacturing work to India by 2017. Boeing has developed relationships with local suppliers and is actively pursuing technical and business partnership with Indian aerospace companies, says Pratyush Kumar, president of Boeing India.

Honeywell has been working with Samtel Avionics & Defense Systems since 2007 to manufacture equipment for general aviation. The Indian company's executive director, Puneet Kaura, says the relationship has since developed into a close partnership.

In the tier below the largest private companies such as Samtel Avionics, Dynamatics and Mahindra Aerospace are suppliers that have been nurtured on state contracts. “Fundamental strength in Indian industry already exists in the form of a large number of small and medium-sized enterprises, which in the past have been suppliers at the sub-component and component level, for aerospace defense public sector undertakings,” says Dhiraj Mathur, the head of the aerospace and defense practice at PwC India. “These companies are gradually transforming themselves into major players in this sector, modernizing with cutting-edge technologies to become suppliers for global aerospace companies vying to outsource products and components from India.”

The opportunity is there, but PWC also points out the challenges: “The aerospace business is highly capital-intensive. In the initial high-growth phase, capital needs to be injected rapidly and continuously to maintain the planned growth rate. Additionally, working-capital requirements, market development, brand building and awareness require significant ongoing investment and expenditure. Funding access can act as an entry barrier into this space.”

The other side of India's role in global aerospace, receiving less attention than manufacturing, is engineering services. Airbus, for example, has brought India into the design and development of the A350, with the Airbus Engineering Center India in Bangalore. The center focuses modeling and simulation in such areas as flight management systems and computational fluid dynamics. It also works on digital simulation and visualization.

Similarly, Airbus has strategic agreements with Quest Global Engineering and Cades Digitech. While Quest, an aerospace engineering and precision manufacturing enterprise, is focusing on Airbus wing and pylon engineering activities, Cades has been working on fuselage engineering.

Signing the deal with Cades two years ago, the head of fuselage engineering at Airbus, Robert Nadine, said the selection process had been driven by the experience and performance quality of Indian suppliers.

Several foreign and private Indian companies have moved into research and development in the country by means of partnerships with public institutions, sharing technology, knowledge and the know-how of commercializing aerospace manufacturing. Prominent partnerships include one by Boeing, which agreed on wireless and other network technologies for aerospace with the Indian Institute of Science, Wipro and HCL.

Aravind Melligeri, co-founder and chairman of Quest, says India's private sector should move up the value chain in terms of what is delivered to customers, especially in aerospace manufacturing. The ability to offer full subsystems or assemblies to global aerospace entities is a vital factor in turning India into a major aerospace outsourcing hub.