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In a huge boost to the government's Atmanirbhar Bharat push in the defence sector, France's Dassault Aviation has partnered with India's Tata Advanced Systems Limited (TASL) to produce the fuselage of Rafale fighter aircraft in India for both domestic and global markets.
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Business Standard
4 hours ago
- Business Standard
RInfra takes flight with ₹5,000 crore bet on aircraft upgrade business
Reliance Infrastructure is looking to turbocharge its defence vertical with a focus on aircraft upgrade programmes, eyeing an opportunity of ₹5,000 crore over the next 7-10 years, sources said. This strategic foray positions Reliance Infrastructure as India's first private sector company to independently execute a comprehensive aircraft upgrade programme without being the original manufacturer -- a domain traditionally dominated by public sector units and OEMs. According to a company source, the company has already marked a significant milestone by successfully upgrading 55 Dornier-228 aircraft under a contract with Hindustan Aeronautics Ltd (HAL), in collaboration with US-based avionics firm Genesys. Initially awarded a contract for 37 aircraft, Reliance secured a repeat order for an additional 18 units following the successful execution of an earlier contract. The total value of the Dornier upgrade contract was ₹350 crore, sources said. The upgraded Dornier fleet is operational with the Indian Air Force, Indian Navy, and Indian Coast Guard. With military aircraft and helicopte₹having a service life of 30-40 years, regular upgrades -- particularly of avionics, mission systems, and safety equipment -- are vital. Industry experts estimate that lifecycle investments in upgrades and MRO can reach up to 200-300 per cent of the original acquisition cost of a platform. Globally, the market for military aircraft and helicopter upgrades stands at over ₹5,00,000 crore annually, and is projected to rise to ₹700,000 crore in the next seven years. India, with a vast inventory of legacy platforms, offe₹a substantial domestic opportunity, especially as the armed forces modernise older fleets for next-gen warfare. Reliance Infrastructure is now looking to scale up its aircraft and helicopter upgrade capabilities, working with global partne₹to deliver world-class solutions. In addition to the Dornier upgrade success, the company is also a key player in the performance-based logistics (PBL) program for Rafale fighter jets in India, in partnership with Thales of France. Reliance investments in this domain align with the vision of 'Atmanirbhar Bharat' while tapping into a multi-billion-dollar global market. With its growing portfolio and proven execution, Reliance Infrastructure is poised to become a major private player in the defence aviation ecosystem, bridging the gap between cutting-edge global technology and the operational needs of India's armed forces. For industry stakeholde₹and investors, Reliance's aircraft upgrade strategy represents a high-potential play in India's defence manufacturing and services sector, with scope for international collaboration and recurring revenue models.
Mint
4 hours ago
- Mint
Policy U-turn? New govt notice hints at easier local sourcing rules for telecom equipment makers
A government notice last week hinting at a possible flip-flop in India's local sourcing policy for telecom equipment has left domestic manufacturers such as Tata Group's Tejas Networks Ltd fretting about losing ground to global companies like Nokia and Ericsson. Under current rules, telecom equipment manufacturers must source 50-60% of their total bill of materials locally to be selected as Class-I local suppliers—the preferred bidder category—in tenders floated by public sector undertakings and ministries for certain products. However, in a notice dated 3 June, the Department of Telecommunications said India's limited components ecosystem posed challenges in achieving 50-60% local sourcing for electronic and telecom products. 'Recognizing this constraint, the conditions for local content qualification also requires a review," DoT said. But just eight months earlier, in October, the department had said 36 telecom equipment categories had sufficient local capacity and competition, and maintained a 50-65% local value-addition requirement for products such as ethernet switches, unified threat management platforms, 4G mobile systems, optical fiber, and certain Wi-Fi products. Domestic telecom equipment makers warn that any relaxation in the local sourcing policy would undermine India's self-reliance or Atmanirbhar Bharat agenda and give an unfair advantage to multinational firms. 'There is no need to reduce local content for telecom equipment. None of the domestic design-led players have raised the issue," said Rakesh Bhatnagar, director general of Voice of Indian Commtech Enterprises (VoICE), which counts Tejas Networks, HFCL Ltd, VVDN Technologies Pvt. Ltd, and STL Tech, among its members. 'It appears to be a back-door opening being made to support MNCs (multinational companies) and is totally going against the policy announcements being made at the highest level." Also read | Telcos slam Trai's satellite spectrum pricing as unfair, call for comprehensive review According to Bhatnagar, given the ongoing situation of neighbourly hostilities, India should ensure that no software and programmable parts in sectors such as electronics, telecom, space, and nuclear energy come from foreign suppliers. On the other hand, executives at foreign telecom equipment makers say a short-term relaxation is essential considering India's continued dependence on imports for key components such as semiconductors, advanced chipsets, and specialized telecom modules. Lately, companies such as Finland-based Nokia and Sweden's Ericsson have been lobbying the Indian government to relax certain rules so they can participate in government tenders, industry executives said. 'We are looking at all the possible options to participate in government tenders and pitch the government to relax certain rules," said an executive at a global equipment maker, adding that while a majority of the company's supplies go to private firms, the government sector is also a big revenue area for telecom equipment. Nokia, Ericsson, Tejas, HFCL and VVDN did not reply to queries emailed on Friday. Also read | Trai, telecom companies spar over data demand Make in India: Hits and misses India's local value-addition rules—issued as part of the Public Procurement (Preference to Make in India) Order, 2017 policy—specifies the eligibility criteria for manufacturers to be classified as Class-I local suppliers to government departments. Local-value addition refers to the percentage of a product's manufacturing cost that comes from components and processes done in India. Manufacturers meeting a minimum threshold—typically 50% or more—are classified as Class-I local suppliers, giving them preference in government tenders over other companies. In March, the government approved a $2.7-billion ( ₹22,919 crore) outlay to incentivize local manufacturing of electronics components, setting goals for domestic and foreign entities to establish local component manufacturing facilities at subsidies of up to 50% of the project costs. With the scheme, the government aims to increase the local value addition to 40% in electronics manufacturing from 20% now. State-owned Bharat Sanchar Nigam Ltd (BSNL) managed to roll out its 4G network on indigenous telecom stack developed by Tejas, Tata Consultancy Services Ltd, and the Centre for Development of Telematics. But several private companies still rely on equipment developed by global companies for a significant portion of their networks. Also read | How Samsung and 20 others missed out on an ambitious incentives scheme 'A short-term review of local content requirements is important to ensure that manufacturers remain competitive while the component ecosystem matures," said Paritosh Prajapati, chief executive and founder of Sweden-based GX Group, which is also a beneficiary of India's productivity-linked incentives (PLI) scheme for the telecom sector. He, however, acknowledged that any such relaxation could put pressure on smaller and mid-sized domestic players, especially those still in the process of building scale. 'Any relaxation must continue to incentivize companies to shift R&D (research and development), design, and IP (intellectual property) rights to India, aligning with the vision of Atmanirbhar Bharat," Prajapati said. India's PLI scheme has got global giants such as Apple Inc., Ericsson, Germany's Siemens AG, China's Foxconn, and The Netherlands' Philips NV investing and producing more in India, he pointed out. As per the government's October notice, product design work done in India must contribute up to 55% towards meeting the domestic-value addition policy's 65% threshold. However, 'there is very less design being done in India as the products are being assembled through contract manufacturers", said an executive at a local telecom gear maker, requesting anonymity. Also read | Next-gen telecom tech to get ₹1,000-crore yearly R&D boost under telecom policy Cracks in compliance The Department of Telecommunications, besides reviewing product-wise local content requirements, also plans to review conditions of inputs, including design, to be qualified as local content and the criteria for calculating local content for software products. 'While the Indian component manufacturing ecosystem is thriving, the government has to handhold it to help it build a stronger foundation to achieve the stated goal of $500 billion in electronics manufacturing by 2030," said Harsh Walia, partner at law firm Khaitan & Co. 'In order to do so, lowering the threshold may encourage more realistic compliance and foster growth in the sector while still promoting domestic production. However, it should be balanced to ensure continued support for local industries and avoid excessive reliance on imports," Walia said. 'By offering turnover and capex linked incentives for manufacturing of listed products, the government aims to increase investment in the (telecom) sector, which will further strengthen the manufacturing for telecom equipment and assist in its exponential expansion," he added. The Public Procurement (Preference to Make in India) Policy (PPP-MII) was introduced with the goal of strengthening domestic manufacturing and reducing dependency on imports, especially in critical sectors. The broader policy is handled by the Department for Promotion of Industry and Internal Trade (DPIIT), with other ministries notifying the same based on their respective areas to boost domestic manufacturing. Also read | The ambitious and ambiguous rise of Huawei as a telecom giant There have been multiple complaints, however, that tenders floated by various ministries have not been at par with DPIIT's rules and favour foreign brands. In 2024, DPIIT scrutinised 867 tenders on a random basis. Of these, 259 tenders were found to be non-compliant with the provisions of the Public Procurement (Preference to Make in India) Order, 2017. Reasons for non-compliance included mention of specific brands, excessively high turnover requirements, global tenders floated without approval from a competent authority, failure to follow notifications issued by the nodal ministry, and insistence on foreign certifications. In 2023, a government investigation also found an incorrect claim of local content by bidders that had won tenders floated by state-run organisations such as Maharashtra Metro Rail Corporation Ltd and Oil and Natural Gas Corporation Ltd.
Time of India
5 hours ago
- Time of India
Reliance Infrastructure takes flight with Rs 5,000 cr bet on aircraft upgrade business
Synopsis Reliance Infrastructure is significantly expanding its defence sector presence, targeting a ₹5,000 crore aircraft upgrade market over the next 7-10 years. Having successfully upgraded 55 Dornier-228 aircraft, the company aims to become a key private player in India's defence aviation, aligning with 'Atmanirbhar Bharat' and partnering with global firms like Thales for projects such as Rafale fighter jet logistics.
