Why in News? Recently, the Indian Air Force (IAF) received the first of the 56 C295 aircraft, which are set to replace its ageing Avro-748 aircraft fleet.

Background:

• In September 2021, India signed a deal with a European Corporation named Airbus Defence and Space to procure 56 C295 aircraft to replace the Indian Air Force’s ageing Avro-748 planes, which entered service in the early 1960s.
• Under the agreement, Airbus will deliver the first 16 aircraft in ‘fly-away’ condition from its final assembly line in Seville, Spain within four years.
• The subsequent 40 aircraft will be manufactured by Tata Advanced Systems Ltd (TASL) in India as part of an industrial partnership between the two companies.
• The 16 fly-away aircraft are scheduled to be delivered to the IAF between September 2023 and August 2025.
• The first Made-in-India aircraft will be rolled out of the manufacturing facility in September 2026 and the remaining 39 will have to be produced by August 2031.
• After the completion of the delivery of 56 aircraft to the IAF, Airbus Defence and Space will be allowed to sell the aircraft manufactured in India to civil operators and export to countries which are cleared by the Government of India.
• All 56 aircraft will be fitted with an indigenous electronic warfare suite to be developed by Bharat Electronics Ltd and Bharat Dynamics Limited.

Current Status of C295 Manufacturing in India:

• The 40 C295 aircraft are being made in India at Vadodara, Gujarat.
• Last year, TASL had set up a factory in Hyderabad where the manufacturing of the major airframe components, such as fuselage and tail, started in July this year.
• After the major sections of the aircraft are assembled at the Hyderabad facility, they will be transported to the Vadodara facility next year.
• The factory or the final assembly line in Vadodara will have a capacity of producing 12 aircraft per year.

Significance of the C295 Deal:

• The acquisition of the aircraft is significant for two reasons:
  • First, it will replace the Avro-748 aircraft fleet of the IAF, which was acquired in the 1960s.
    • Hence, it will provide a fillip to the IAF’s air transport duties in carrying troops and material to different parts of the country.
  • Secondly, the acquisition sets into motion India’s first-ever ‘Make in India’ Aerospace programme in the private sector.
  • So far, the state-owned Hindustan Aeronautics Limited (HAL) has had a monopoly over the manufacture of military aircraft in India.
  • This deal will boost India’s aerospace sector with 15,000 high-skilled jobs and 10,000 indirect jobs in the next 10 years.

Indigenisation of Defence Production in India:

• The Central Government has taken several policy initiatives in the past few years under 'Make in India' program and brought in reforms to encourage indigenous design, development and manufacture of defence equipment in the country.
• To make India self-reliant in the Defence sector, the Ordnance Factory Board (OFB) was split into seven different companies in October 2021.
• These seven new Defence PSUs are 100 per cent government-owned corporate entities and will help in improving the country’s self-reliance in defence preparedness.
• Budgetary Allocation: 
• For the year 2023-24, the budgetary allocation for defence is Rs 5.94 lakh crore, 13 per cent of the government spending and 2.04 per cent of the GDP.
• Though Rs 5.94 lakh crore allocation is 4.43 per cent more than the previous year, a major chunk, around 63 per cent of the capital procurement budget is be earmarked for the domestic industry in 2022-23.
• Exports:
• India’s defence exports have recorded nearly a six-fold increase between 2017 and 2021, growing from Rs. 1,520 crore to Rs. 8,435 crore.
• Defence items being exported by India include missiles, the advanced light helicopter, offshore patrol vessels, personal protective gear, surveillance systems and a variety of radars.
• The value of defence production in Financial Year (FY) 2022-23 has crossed the figure of Rs 1 lakh crore for the first time ever.

• A number of policy reforms have been taken to achieve the objective of ease of doing business, including the integration of MSMEs and start-ups into the supply chain.

Defence Acquisition Procedure (DAP) 2020:

• The DAP 2020 has been established as a potential catalyst for the Atmanirbhar Bharat Abhiyaan, in the sector of defence manufacturing.
• The DAP focuses on simplifying the defence acquisition and institutionalising monitoring mechanism for selection of best equipment in a transparent and competitive manner.

Conclusion:

• As a result of such policies, the industries, including MSMEs and start-ups, are forthcoming in defence design, development and manufacturing.
• There is almost a 200 per cent increase in the number of defence licenses issued to the industries in the last 7-8 years by the Government.
• These measures have given a boost to the defence industrial manufacturing ecosystem in the country and generated tremendous employment opportunities.

Source: Indian Express