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Chinmay Khadke asked: Is there any ToT involved in C295 transport aircraft to be built by Tata-Airbus in India? What can be its implications for the aviation manufacturing ecosystem? Any potential civilian transport use of aircraft?

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  • Kishore Kumar Khera replies: A contract for procurement of 62 C295 aircraft is under consideration for replacement of 56 HS748 Avro for the Indian Air Force (IAF) and the balance six aircraft for the Indian Coast Guard. Of these, 16 aircraft are to be built by the original equipment manufacturer (OEM) and the balance aircraft will be manufactured in India. To facilitate aircraft manufacturing in India, certain Transfer of technology (ToT) is inevitable. However, the nature and extent of ToT will depend on the memorandum of understanding (MoU) and contractual obligations between the OEM and its Indian partner.

    Modern aircraft have complex architecture and represent a system of systems. Three basic tenets of modern aircraft are the airframe (or structure of aircraft), power plants (or engines and its accessories for the generation of power) and avionics (or equipment onboard aircraft to assist in mission accomplishment). The aircraft manufacturer’s focus is on the airframe and integration of other facets to make it mission compatible. And most of the components are sourced from various specialist vendors. It not only reduces the costs but also allows compressed timelines for the development of new platforms. The contractual obligations between the aircraft manufacturer and various sub-contractors play a pivotal role in ToT.

    The ToT for C295 is likely to take place in three distinct phases. In Phase I, the focus will be on Indian partner’s ability to assemble the aircraft from fully/semi-knocked down kits. In the next phase, technology and wherewithal transfer may generate the ability to manufacture low technology and low-cost components. In the final phase, most parts of the aircraft could be manufactured in India. The pace and execution of these phases of ToT will primarily depend on two factors. Firstly, the scale of manufacture for Indian entities to exploit economies of scale. The second factor will be the economic and regulatory impact for the OEM. In case manufacturing of certain assemblies and subassemblies proves to be economical and with no additional regulatory restrictions, the OEM may permanently part shift manufacturing base to India. Should that happen, it will create a downstream ecosystem and a large number of medium and small-scale enterprises would benefit by setting up manufacturing facilities for specific components. Alongside, this may trigger research and development in this sector.

    Like most aerial platforms, even C295 can have application in civil aviation. With COVID-19 and its impact on air travel, a number of regional airlines or non-scheduled operators may re-evaluate their inventory and look at C295 as an option.

    Posted on September 15, 2020

    Views expressed are of the expert and do not necessarily reflect the views of the Manohar Parrikar IDSA or the Government of India.

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