Ahead of the presentation of Budget 2024, Pavan Ranga, CEO of Rangsons Aerospace, shares his vision for the future of India’s aerospace and defence sectors. He highlights the urgent need to move away from the dependence on the public sector for manufacturing and R&D, which has hindered progress.
In an exclusive interaction with Financial Express.com, Ranga stresses the importance of incentivizing private sector involvement through stable and supportive policies.
Budget 24-25
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He advocates for a significant boost in research and development funding, proposing an increase to 2 percent of GDP to foster innovation and global competitiveness. Additionally, Ranga calls for the privatization of some Defence Research and Development Organisation (DRDO) laboratories to enhance efficiency. Emphasizing technology transfer in new aircraft deals, he believes these steps are crucial for India to achieve its ‘Make in India’ aspirations and become a global aerospace leader.
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Following are excerpts:
Expectations from Budget 2024 for the Aerospace and Defence sector
If a big private player were to enter the aerospace arena, it will take maybe a decade or more to catch up in some spheres of Hindustan Aeronautics Limited (HAL) activity. However, after that, it will leave HAL far behind or may also bring HAL into increased productivity levels. It is time the PMO took on a more intimate role in the aerospace industry so that the loud refrains about ‘Make in India’ and ‘global aerospace hub’ are consummated
Expected Increased investment in research and development for the aerospace and defence sector and how critical this is for driving innovation and competitiveness in the industry?
A globally competitive Indian aerospace industry can result only if we invest in R&D. For a long time, our R&D as a percentage of GDP has been less than one percent. There is a need to increase it to at least two percent of GDP for India to innovate in aerospace to the extent that it approaches the leading edge of technology. It might be a good idea to include this as an expenditure head of R&D in annual budgets to ensure it is used accordingly. DRDO currently operates 51 laboratories. It is time to start privatising some of these so that their efficiency and productivity can be brought to acceptable levels and budgeted R&D funds utilised maximally.
One hopes that the MRFA deal will be conducted after incorporating lessons from the failed MMRCA deal. Leading edge aerospace technology can only come through technology transfer built into new aircraft deals including engine technology which has eluded our R&D so far. The other route of original research will take a long time even if budgetary provisions are increased from present 0.7 percent of GDP to two percent. Unless we develop or acquire that level of technologies, our aerospace programme may, in letter, be ‘Made in India’, but will fall short of the spirit of ‘Make in India’.
A globally competitive Indian aerospace industry can result only if we invest in R&D.
Many private companies have made rapid strides in developing India as a preferred destination for aero structures, components, sub-assemblies and complex system assemblies. Leading global OEMs have established JVs in India for the manufacturing of aerospace related parts and assemblies which find their way into many commercial and defence aircraft and helicopters. The sector has seen adoption of best practices and maintains international standards in quality for components but India as a country has yet to address the need to develop more facilities that provide end-to-end aerospace solutions.
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How do you see the government incentivizing domestic manufacturing within aerospace? Are there specific policies or tax incentives you believe could significantly boost the sector?
The government has embraced several policies to support innovation and domestic technology development, recognizing the Strategic importance of the aerospace sector. The “Make in India” campaign promotes local aeronautics equipment and systems manufacturing. It helps transfer technologies and knowledge exchange by fostering collaboration among companies from India and abroad. Incentives for making manufacturing units or research and development centers are presented under the “Aerospace and Defence Manufacturing Policy,” which is also aimed at stimulating innovation. The “National Civil Aviation Policy” boosts regional connectivity and promotes maintenance, repair, and overhaul activities. Partnerships between research institutes, academia, and industry players to devise cutting-edge technology in aeronautics are stimulated by the “SST&I Policy.” Indian collaborations with international aerospace organizations have contributed to various sectors like space exploration, satellite development, aircraft manufacturing, and research.
Expectations on the skill development side
Innovations in aerospace and aeronautics often require a delicate equilibrium between progress and safety. Stricter security protocols become critical, given the potential consequences of failures in these sectors and ethical considerations about environmental impact and privacy in technologies like drones require cautiousness. To ensure that innovation does not come at the cost of safety and ethical responsibilities, incorporating safety qualities, conducting rigorous testing, and fostering open discussions on ethical implications are essential.
The future of Indian aerospace and aeronautics has promising opportunities. The development of reusable launch vehicles and advancements in satellite technology offer considerable growth potential. At the same time, the rise of electric and hybrid propulsion systems paves the way for sustainable aviation practices. Public and private sectors are promoting a robust ecosystem for aerospace startups, and research initiatives through investments in research and development will drive breakthroughs in materials science, supersonic travel, and AI-driven aviation systems. India’s talent and cost-competitive manufacturing capacities position it admiringly for global partnerships and joint ventures.
Hence, addressing challenges while fostering innovation with safety and ethical standards is necessary for the growth of the Indian aerospace and aeronautical sector and advancements in space exploration, sustainable aviation, and collaborative actions, positioning India at the forefront of aerospace innovation.
