India’s aerospace and defense industry has come a long way and made significant strides over the past few decades, evolving from a nascent sector into a globally competitive one, driven by innovation and a powerful strategic vision. It has always been recognized and prioritized within the country due to its importance for national security and economic growth.
In the past, this industry was heavily focused on import substitution and a minimal emphasis on furthering research and development. However, since private sector participation was encouraged, India’s aerospace and defense sector blossomed, and we now have major players that are doing some tremendous work in this field.
From design and development to manufacturing and testing, Indian firms have made significant and noteworthy contributions to both civil and defense sectors, with a diverse range of indigenous capabilities spanning the entire value chain.
We have had a lot to celebrate over the years. The development of the Light Combat Aircraft (LCA) Tejas, was a state-of-the-art aircraft that was a testament to what India can achieve with respect to design and development. The country’s space program also achieved significant milestones, including the launch of Chandrayaan-2, the second lunar mission.
Looking towards the future- it’s bright as can be; India’s A&D industry is poised to continue its impressive growth trajectory, with a focus on developing and utilizing next-generation technologies to their fullest potential and expanding the country’s manufacturing capabilities. The government’s continuous push and commitment to self-reliance under the “Make In India” or “Atmanirbhar Bharat” initiative, has provided a significant impetus to this field. This has not only created employment opportunities but also helped in the localization of the supply chain, reducing dependence on imports. As India continues progressing and making a mark on the world with increasing economic clout, all the eyeballs are towards us.
Overall, India's aerospace and defense industry is a source of immense pride for the country, as it is a testament to the country's technological capabilities, strategic vision, and hardworking relentless spirit. It is safe to say we are now well-positioned to become a major player in the global market.
However, this space has always been perceived to function in a silo. The ‘gates’ seem to be closed to the public and it is difficult to know what progress we are making at different points in time. It’s important for organizational players in the industry, defense veterans, leading minds in academia, as well as decision-makers in the government, to regularly come together to collaborate, share knowledge, and brainstorm to pave the way for a more transparent and efficient way of working.
In an effort to do just that, Global Talent Exchange recently organized a virtual roundtable discussion as part of our Technology Game Changers Series on “Sky’s The Limit: Exploring The Advancement Of Aerospace Technology In India”.
This discussion was moderated by Satya Chakravarthy (Head, NCCRD and Aerospace Engineering, Professor at IIT Madras). He works in the areas of propulsion and combustion and researches the different aspects of combustion in gas turbines and rocket engines. He is now also heading the Centre of Propulsion Technology supported by DRDO and has over 80 peer-reviewed archival journal publications to his credit, presented over 200 conference papers, and received over 6 awards including the DRDO Academic Excellence Award.
The panel was made up of 10 industry leaders, who enriched the dialogue with their enthusiasm, vigor, active participation, and insightful views and perspectives.
While the session was a closed-door one, we wish to build a community that benefits from the widespread knowledge of certain pioneers in tech. Here’s a rundown of what was discussed.
Satya set the tone for the session with an opening note on how India was also perceived to be lagging behind the world in the race for development in aerospace and defense. However, now, we’ve done a fast catchup; India is at par with its competitors, if not sometimes ahead.
The canvas of this industry is very huge, and there are a lot of topics to touch upon- be it civil aviation, military drones, engines, space launch vehicles, drones, or others.
To start with, the panel was asked a very important question.
How was Indian aerospace evolved over the past few years and what have been the key catalysts for growth? What are the existing hurdles facing acceleration at present and how must we surmount them?
An industry leader pointed out 4 key catalysts that have been driving growth in this industry and that have contributed to the changes that we are now privy to.
i) Rising armed conflicts: Aerospace markets have now come up in areas that weren’t emphasizing them a few years ago, and this is due to the dramatic increase in armed war conflicts after a long period of peace and relative stability. Be it missiles or aircraft systems, a huge demand is being created and these markets are yet to come up to the same level as the Western countries. The polarization is huge, and to bridge that, there has been growth in A&D.
ii) Increase in global defense spend: The global defense spend has gone up from 2.1% to 2.4%, and while that might not seem very significant at first glance, it is actually a very meaningful increase that clearly displays the increase in demand. Several cultures like Japan, which preferred to not indulge in this space to a large extent, are now taking a lot of interest and increasing their capabilities to match up to their counterparts. No one wants to get left behind in this ‘race’.
iii) Shift in localization in industry development: When it comes to aerospace and defense capabilities, each country wants to be standing on its own two feet and developing everything within their land to reduce reliance on the others, since after all, it is a matter of national interest and security. Even India, with its emphasis on Atmanirbharta, is reducing its purchases from other countries and is focused on developing and manufacturing within. This is something that must happen, without which the industry will continue facing bottlenecks and challenges.
iv) Emerging technologies/ research and development: Artificial intelligence, Machine learning, blockchain, and other such revolutionary technologies are changing the face of aerospace and defense in India and even outside it. It allows us to expand our vision, and make things possible that we might not have even thought of a few years ago, like software-defined satellites.
The discussion then shifted to the challenges that are apparent in the industry today.
All the panelists felt that a strong focus on research and development was lacking in India. Despite our immense capabilities, we are lagging behind the likes of USA and Japan, and Korea, and the biggest pain point is the shortsighted investment strategies of the stakeholders.
This industry demands high investment requirements, huge spends, and a restrictive regulatory environment combined with limited access to technology holds the country back from achieving its fullest potential. We lack localization in the areas of aircraft, missile systems, engines, and air defense capabilities.
However, the tide is changing. Aerospace and defense budgets are going up, foreign direct investments are increasing, and the CAGR is 8% as of now. In the last 5 years, the demand is increasing, the ecosystem is growing and incentivization is on the correct track, but the supply is woefully inadequate. Moreover, for the F35, which is the most advanced fighter jet in the world, most of the design was done in India itself.
A speaker traced the history of the industry. He mentioned that historically, India has always focused more on defense and less on civil aviation. In the last 15 years, a lot has changed. In 2003-2007, several airlines came out and placed massive orders. There was a growth of enthusiasm and everyone had their eyes peeled on the next developments that will take place. Around 2005, however, was when a major change happened. The automotive and IT sectors jumped in with their services, after which the private sector in A&D grew phenomenally. They have since moved up the value chain and there are around 100-150 medium and large companies in the aerospace supply chain to date. If there is a hurdle in their path to escalating to Tier I, it is that all of them seem to be focusing on their engineering services while turning a blind eye to design.
Several panelists also were keen to talk about OEMs (original equipment manufacturer). An industry veteran mentioned that India is still using systems from the USA, Israel, Russia, etc. and when we do so, we cannot customize the system according to our needs and requirements, and this is a massive challenge. The biggest achievement for players in aerospace and defense would be when they would become the OEM for the industry.
He also pointed out that we need a more structured way of working. It should flow from aircraft requirements to system requirements to operating different verticals like mechanics, hydraulics, software, validation, and testing. Moreover, when we do so, we must adhere to international standards and receive the proper certifications.
A leader mentioned an interesting speech by the CEO of Boeing, wherein he addressed the fact that despite his company being 100 years old, they have to still stop and think like a 3-year-old company. Only then can progress truly take place.
The conversation then shifted toward drones and UAVs. The CAGR prediction for growth was 26.6% but the drone sector in India is punching above its weight and hitting around 30%. There is a prediction that by 2040, there will be 400k unmanned vehicles in the sky and this will create around 280k jobs in the USA. If India needs to be a part of this, we need to move fast. The regulatory landscape has been rapidly evolving and it is now a relatively free regime- India needs to spruce up its global dialog and show the world its capabilities and what it has been doing all along.
A major challenge for the drones and UAVs is that the business cases are not very emphasized upon and they are largely unproven. However, they add a lot of value in the long run and the benefits can be realized even from an economic standpoint. They are cost-efficient and are a futuristic solution to some of humanity’s biggest challenges and threats- like the lack of good-quality healthcare and medication in remote areas, infrastructural developments, and the gap between the rural and urban. The community impact is huge. There is a project that involves mapping the data of over 1 billion people at less than 300 crores with these drones. They can be used to evaluate the structural integrity of buildings, inspect mines, power grids, and more. It requires ports and vertiports and robust traffic management systems. Also a challenge is the lack of technological maturity. It is a grossly underfunded sector when you evaluate the kind of impact it is having on the world. Those countries that properly utilize them have a technical and tactical advantage over others. The entry barriers in the drone industry are not huge; we must leverage that.
The conversation was then shifted towards a different aspect. The panelists were asked about Atmanirbharta in Aerospace and defense. How can the country achieve self-sufficiency in this space?
Most of the panelists believed that the current regulatory landscape is good, and the industry has a free hand in a lot of aspects. The speed at which things are changing is ‘crazy’ at times. However, there is a lack of initiative and collaboration between the players in the industry- they must get together, brainstorm, and tell the government/decision-makers what they need and how they need it.
One leader believed that engineers and young professionals in the country must not just be put through exams to work in A&D, they must be given practical exposure and on-field training to properly understand the landscape.
India has the funds- we’re purchasing several aircrafts to fulfill our requirements but there is a serious lack of testing or research centers. Funds must be directed towards this if we want to be truly ‘atmanirbhar’.
Yet another panelist believed that the large view of self-reliance means shutting your doors to the outside world. However, this is an incorrect approach. India must open their doors to exports if not imports, we must make it economical, build our talent and skills, and create something that the world wants to purchase from us!
How has the government been actively involved in the betterment of Indian A&D? What are the areas that require immediate focus and attention?
All of the panelists felt that the government has done a lot. If anything needs to change, there needs to be greater support given to the MSMEs that are coming up in this space.
Large investors are afraid of putting in money; they want to know that there will be some takers and that there will be business before they invest. The government can play a huge role here as well.
One panelist felt that there is an urgent need to develop a national aerospace policy that clearly identifies the gaps and technological requirements, and then drives development accordingly. For that, the government probably must form a panel/body to work on it.
There was also talk on offsets and how they play a huge role in the country, but are often misused. Thus, urgent change is required in this aspect as well.
The panelists were then asked to talk about the environmental benefits of sustainable aviation. What are the potential solutions for reducing Indian aerospace’s carbon footprint? How can we bring about an improvement in fuel efficiency?
The panelists agreed that the future of aerospace is entirely around sustainability. India has formed a very strong structure and base, and some would argue that even though our country was heavily focused on only engineering- that’s part of the reason we are as successful today.
However, of course, this needs to change. We have huge challenges as a country, but disruptive technologies that are coming in can help us achieve the kind of sustainability goals that we’ve envisioned such as in hydroelectric propulsion and usage of thermoplastics.
There will be a major disruption in the supply chain because of sustainability initiatives. However, we need a clear vision for the future and need to stick by it. We, as a country, seem always to be reacting in the present and that’s not how progress is achieved.
There are nearly 10,000 startups in India just in the defense sector, but they do not have a lot of global reach. We must think big and re-evaluate the vehicles for innovation. Accelerators must be identified.
One leader also mentioned the fact that NPIs (new product integration) used to be a common occurrence a decade ago, but now, we have none. We need to get back on track with that as well.
When asked if the industry will be able to transition to hybrid/electric aircrafts by 2030, the response was very interesting. The panelist revealed that there are deadlines in place and the stakeholders are adhering strictly to them. They are aiming for hybrid electric aircrafts by commercial airlines by 2030-2035.
The panelists were then asked about the role of startups and MSMEs. Why is this industry still so small and limited in a massive country like India? How can the emergence of new-age startups in this space prove beneficial?
Leaders felt that startups and medium-sized organizations are extremely important in aerospace and defense. They take up solutions that the large, legacy players are not willing to at times, as they don’t want to stray paths.
There is a need for complete ownership of IP, and startups can do that better. They can solve tough problems and they are also likely to attract a lot of the young, skilled talent in the country. Startups are agile and flexible, which is something A&D needs right now.
Indeed, a lot of startups are not able to crack their way into the global markets and that can be attributed to challenges such as a lack of maturity in quality and a lack of talent in the industry.
The talent shortage in aerospace and defense in India is a massive pain point. The panelists were asked what skills and expertise are currently in high demand. Why is this challenge so prominent?
Human talent deficiency is major, there’s no denying it. A few leaders felt that academia is not aligned with what the industry requires at present. There are also no significant incentives for choosing this as a career path- most professionals are likely to flock to jobs that are cushiony, comfortable, and “easy”. This brings about the danger of the “softwarization” of aerospace; this kind of career is not about sitting at a desk and working, it’s about gaining real expertise in the field.
Everyone in this industry seems to be losing out on talent and continuously hiring to fill the skill gaps that are inevitably created.
There is an urgent need for collaboration between the government, academia, and industry to develop future skills. If we intend to meet the manufacturing goals, we need people- that too experienced ones.
There is also a very real need to look beyond the borders and attract back the Indian talent we’ve lost out to the West.
The discussion served as an eye-opener for all present.
This closed-door conference was the 10th in our Technology Game Changers Series and we are gearing up for the next. Stay tuned!
Till then, enrich your understanding of these technologies as well: