Success Story

Safran Group

Safran subsidiaries, Safran Aircraft Engines and Safran Electrical and Power, inaugurated manufacturing facilities in Hyderabad on 7th July 2022. Safran Aircraft Engines will produce rotating turbine seals for the LEAP engine. The plant spans more than 15,000 square meters and is outfitted with the latest-generation machinery and equipment. Safran Electrical and Power will assemble wire harnesses for civil and military jets.

Safran was adequately supported through the entire investment cycle of both projects in India. Safran was provided with regulatory advisory on the industrial license and offsets procedures as well as close consultation on location analysis in over 7 states and visited over 20 locations before finalizing Hyderabad as the investment destination. The Telangana State Government also provided competitive incentive packages for the respective projects. Over time the relationship with the Telangana State Govt. has matured and has resulted in Hyderabad becoming a manufacturing hub for Safran in the Asia Pacific region.

In recent years, Safran has won multiple contracts with Indian airlines to supply its CFM engines for the Airbus A320 NEO aircraft. Conscious of Indian carriers undertaking MRO services in Sri Lanka, South-East Asia, or the Middle East, there is a common aim across the industry to reduce India’s import dependency on MRO services. In this regard, tax structures for MRO services were aligned with leading global jurisdictions in April 2020 with the help of the industry stakeholders. This has led Safran to announce that it will be setting up its largest MRO engine-overhaul unit in Hyderabad in 2025.

Key Investments Announced in the Defence sector 

Safran Group: Safran to set up a $150-million MRO facility

French aircraft engine maker Safran plans to set up a Maintenance, Repair and Overhaul (MRO) facility in India for the overhaul of LEAP-1A & LEAP-1B engines in use by Indian and foreign commercial airlines. The MRO facility through the direct foreign investment of $ 150 million in Hyderabad is expected to create 500-600 highly skilled jobs. The facility will be able to overhaul over 250 engines per year in the beginning.

Policy Initiatives

• 3rd Indigenization List by DDP – 8th August 2022

In continuous pursuit of self-reliance in defence manufacturing and to increase the indigenous content by Defence Public Sector Undertakings (DPSUs) under ‘Aatmanirbhar Bharat Abhiyan’, the third Positive Indigenisation List (PIL) of 780 strategically important Line Replacement Units (LRUs)/Sub-systems/Components has been notified with a timeline beyond which they will only be procured from the domestic industry.

This list is in continuation to the two PILs of LRUs/Sub-systems/Assemblies/Sub-assemblies/Components that were published in December 2021 and March 2022. These lists contain 2,500 items which are already indigenised and 458 items which will be indigenised within the given timelines. Out of 458, 167 items (1st PIL -163, 2nd PIL - 4) have been indigenised, so far.

• 4th Indigenization List by DMA – 19th October 2022

One of the key constituents of the Government of India’s Atmanirbhar Bharat initiative is to transform the defence sector to achieve self-reliance and boost the export of Defence items, by promoting the public and private sectors. Following the first, second, and third positive indigenization lists comprising a total of 310 items, the fourth positive indigenization list of 101 items was announced by Hon’ble Prime Minister Shri Narendra Modi during the opening ceremony of DefExpo 2022 in Gandhinagar, Gujarat on 19th October 2022. 

The fourth list has been prepared by the Ministry of Defence after several rounds of consultations with the three services and industry stakeholders. It lays a special focus on equipment systems, which are being developed and likely will translate into firm orders in the next 5-10 years. Resembling the first three lists, special focus has been given to import substitution of ammunition. All the items included in the lists will be procured from indigenous sources as per provisions are given in the Defence Acquisition Procedure (DAP) 2020, giving another significant boost towards self-reliance in the defence sector. 

• Make-I & Make-II

The provision of ‘Make’ category of capital acquisition in the Defence Procurement Procedure is a vital pillar for realising the vision behind the ‘Make in India’ initiative of the Government, by fostering indigenous capabilities through design & development of required defence equipment/product/systems or upgrades/ sub-systems/components /parts by both public and private sector industry in a faster time frame.

A collegiate meeting headed by Secretary (Defence Production) on Make projects held on 11th July 2022, accorded Approval In-Principle (AIP) to one Make-I and 7 Make-II projects taking the total tally of Make-I & Make-II projects to 10 and 81 projects respectively.

Defence Industrial Corridor – Uttar Pradesh & Tamil Nadu

The two defence corridors in Uttar Pradesh and Tamil Nadu have together signed 111 memorandums of understanding (MoUs) with industries representing investments worth INR 21,904 crores.

• Uttar Pradesh Defence Industrial Corridor (UPDIC)

The Uttar Pradesh Defence Industrial Corridor is planned across 6 nodes, namely – Kanpur, Jhansi, Lucknow, Agra, Aligarh, and Chitrakoot, spreading across the Central, East, and West region of Uttar Pradesh and along the Golden Quadrilateral connecting Delhi-Kolkata by a developed network of expressways.

UPEIDA has inked an MoU with IIT Kanpur Research and Technology Park Foundation, for addressing the growing opportunities and R&D requirements for collaboration of IIT Kanpur with the domestic Aerospace and Defence ecosystem.

UPEIDA has signed 69 Memorandum of Understanding (MoUs) with the industry with a potential investment of INR 10,545 crores. The key players are working across segments such as small arms and ammunition, aerospace composites, UAVs, and Drone and Drone components.

• Tamil Nadu Defence Industrial Corridor (TNDIC)

The Tamil Nadu Defence Industrial Corridor spans across Chennai, Tiruchirappalli, Coimbatore, Salem and Hosur.

TIDCO has signed MoUs with IIT-Madras and DRDO as Knowledge Partners. IIT-Madras will act as a knowledge partner for setting up common testing facilities, infrastructure, certification centres, and training facilities. DRDO will act as knowledge partner for sharing of ideas, resources, and expertise for the development of the defence corridor.

The Tamil Nadu Defence Industrial Corridor (TNDIC) has arranged investment worth a potential of INR 11,359 crores through MoUs etc. with 42 industries. These industries span across manufacturing of radar components, missiles, satellites, launchers and aerostructures, aero-engine components, fasteners for aerospace and defence applications, UAV components, and MRO.

Key/Impactful Investment Events organized

• DefConnect 2.0- April 22nd, 2022

Innovations for Defence Excellence, Defence Innovation Organisation (iDEX-DIO), under the aegis of the Department of Defence Production (DDP), the Ministry of Defence organised DefConnect 2.0 on April 22nd, 2022, in New Delhi. The event was inaugurated by Raksha Mantri Shri Rajnath Singh, with the aim to attract innovators and investors from India’s leading industries in the defence sector. DefConnect 2.0 is a formidable forum for military representatives, startups, and corporate to ascertain the indigenous innovations for the Indian armed forces.

During the occasion, Raksha Mantri Shri Rajnath Singh also launched the ‘Innovations for Defence Excellence (iDEX) Prime’ and the 6th Defence India Start-Up Challenge (DISC 6). The iDEX Prime is designed to support projects in the fast-growing and dynamic defence start-ups that require support above INR 1.5 crores up to INR 10 crores. iDEX Prime is launched with 6 problem statements from the Armed Forces for resolution by startups & innovators.

The DISC 6 was launched with 38 problem statements from Armed Forces, Indian Coast Guard, DPSUs, and Ministry of Home Affairs for resolution by startups & innovators. Apart from the three Services and some Defence Public Sector Undertakings (DPSUs) which have participated in earlier editions, DISC 6 witnesses the participation of newly formed seven defence companies, Indian Coast Guard, and organisations under Ministry of Home Affairs for the first time. The problem statements relate to Artificial Intelligence (AI), Advanced Imaging, Sensor Systems, Big Data Analytics and Autonomous Unmanned Systems and Secured Communication among others.

The third edition of Innovate4Defence internship (i4D) was also launched on the occasion, inviting applications from students all over India.

DefConnect 2.0 is a symbol of increasing technological prowess of the country and a celebration of the continuous growth of the Indian defence start-up ecosystem. It is indicative to the success of the iDEX initiative which has helped in the development of many new and indigenous technologies.

• Launch of Dashboard on the SRIJAN portal- 18th May 2022

The Ministry of Defence launched the comprehensive user-friendly ‘Dashboard’ on the SRIJAN portal to monitor and intensify the process of indigenization. This Dashboard enables real-time end-to-end updates of various activities being taken up by the respective DPSUs during the process of indigenisation. Relevant information such as details of items to be indigenized, tentative order quantity, concerned DPSU, route of indigenization to be adopted, details of expression of Interests and the in-charge Nodal Officer, etc. are available in the public domain, making it accessible to the industry for availing opportunities.

The Dashboard is likely to bolster the drive for indigenization of defence items by DPSUs and intensify the pursuit to achieve self-reliance in defence manufacturing and minimise imports of defence arsenal.

• AI in Defence (AIDef) Symposium – 11th July 2022

Raksha Mantri Shri Rajnath Singh launched 75 newly developed Artificial Intelligence (AI) products/technologies during the first-ever ‘AI in Defence’ (AIDef) symposium and exhibition, organized by the Ministry of Defence in New Delhi on 11th July 2022.

The products, launched as part of ‘Azadi Ka Amrit Mahotsav’ celebrations, fall under various domains such as AI Platform Automation; Autonomous/Unmanned/Robotics systems; Block Chain-based Automation; Command, Control, Communication, Computer & Intelligence, Surveillance & Reconnaissance; Cyber Security; Human Behavioural Analysis; Intelligent Monitoring Systems; Lethal Autonomous Weapon Systems; Logistics and Supply Chain Management, Operational Data Analytics; Manufacturing and Maintenance; Simulators/Test Equipment and speech/voice analysis using Natural Language Processing. Additionally, three of the products developed by the DPSUs having dual use applications, namely AI-enabled Voice Transcription/Analysis software developed by Bharat Electronics Limited; Driver Fatigue Monitoring System developed by Bharat Earth Movers Limited and AI-enabled evaluation of Welding defects in X-rays of Non-destructive Testing developed by Garden Reach Shipbuilders & Engineers, were screened during the event. These products will expand business opportunities for the Defence PSUs.

The Raksha Mantri also released the physical as well as e-version of the book comprising the details of these 75 products. The Raksha Mantri

Hailing AI as revolutionary and emphasizing the scientific & technologically trained youth who have innovative minds and the desire to contribute to Nation Building, the Raksha Mantri called upon all the defence stakeholders to enhance the jointness of human consciousness and the ability of AI to bring a radical change in the sector.

• Swamlamban – 18th -19th July

‘Swavlamban’, the maiden seminar of the Naval Innovation and Indigenisation Organisation (NIIO), was held at New Delhi on 18-19 July 2022 in collaboration with iDEX – DIO.

The highlight of the seminar was the release of the iDEX DISC7 (SPRINT) challenges by the Hon’ble Prime Minister. SPRINT (Supporting Pole-vaulting in R&D through iDEX, NIIO and TDAC) is a collaborative project between the Defence Innovation Organisation (DIO) and NIIO aimed at developing at least 75 indigenous technologies/products as a part of Azadi Ka Amrit Mahotsav. The challenges span across a wide range of niche technology fields including Artificial Intelligence (AI), autonomous and unmanned systems and Information Technology. Challenges will be considered under both DISC (Defence India Startup Challenge) and Prime categories of iDEX. 

• DefExpo 2022

12th edition of DefExpo-2022, on Land, Naval & Homeland Security Systems Exhibition was held from 18th to 22nd October 2022 at Gandhinagar, Gujarat, India. The five-day event witnessed three business days followed by two public days. Live demonstrations showcasing the equipment and skill set of the Armed Forces, DPSUs and Industry were held on all five days at the Sabarmati river front through active participation and synchronized efforts at all levels. 

Spotlight

• TATA-Airbus C-295 Manufacturing Facility Launch

In another significant boost to the Hon’ble Prime Minister’s “Make in India” initiative and a big step toward modernization of the Indian Airforce, Tata Advanced Systems Limited (TASL) and Airbus Defence & Space, S.A., Spain launched the C-295 transport aircraft manufacturing facility in Vadodara, Gujarat on 30th October 2022. 

TATA and Airbus are collaborating on the replacement of the Indian Airforce’s fleet of Avro-748 aircraft with the reliable and robust Airbus C295 medium transport aircraft. The project, worth roughly ~$3 bn will entail the supply of 56 aircraft to the Indian Airforce. Under the contract, 16 aircraft will be delivered in flyaway condition by Airbus between September 2023 and August 2025, and 40 will be manufactured in India by the TATA Consortium. The first Made in India aircraft is expected in September 2026.

The induction of the Airbus C-295 aircraft will give a major boost to the tactical airlift and logistics capabilities of the Indian Airforce, further enhancing the efforts of the Ministry of Defence, Government of India to modernize the Indian Armed Forces.

• INS Vikrant

Starting from the first indigenous warship INS Ajay in 1960, to the first indigenous frigate INS Nilgiri in 1968, the commissioning of the first indigenously designed and built aircraft carrier, INS Vikrant, is a significant punctuation in India’s pursuit of self-reliance or Aatmanirbhar Bharat. Built by Cochin Shipyard Limited, the vessel flags a major milestone in India’s journey to the expansion of its maritime power.

Weighing 45,000 tonnes along with a designed speed of 28 knots (7,500 nautical miles) Vikrant is the largest naval ship to be designed and built in India, and with this accomplishment, India joins the band of a few nations that have demonstrated such capability. The vessel is 262m (860ft) long and almost 60m (197ft) tall and has the capacity to hold 30 fighter planes and helicopters. The flight deck size is nearly 12,500 sqm, allowing 12 fighter planes and six helicopters to operate at once. The ship has gas turbines onboard that can generate up to 80 MW of power. The ship also has a 16-bed hospital, two operating theatres and intensive care units.  

The new Vikrant will sail across both Indian and international waters, accompanied by a fleet of frigates, destroyers, and submarines to protect it. As the Hon’ble PM said during the commissioning of the ship on 2nd September 2022, the carrier has filled the nation with new confidence.