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Friday, August 1, 2008

Eye On India

Promise and Controversy

As filled as it is with promise, the Indian helicopter market is not without its share of turmoil.

Officials of the industry and government, having recuperated from their journey to the Berlin Air Show in May, were busy preparing for a major display last month at the Farnborough Air Show outside London.

Berlin was a success in several respects for India, which was a "partner country" with Germany in the biennial exhibition and conference. Hindustan Aeronautics Ltd’s (HAL) Dhruv advanced light helicopter made its German debut at the show. Flying four of that 5.5-ton-class helicopter, the Indian Air Force’s Sarang helicopter display team was judged the best close-formation aerobatic team at the show.

The Sarang team after Berlin moved on to the United Kingdom, where it was scheduled to perform at air shows at Biggin Hill and Waddington as well as at the Fairford Royal International Air Tattoo and Farnborough. The Berlin honors marked a recovery for the team, which saw a pilot killed in a February 2007 crash during rehearsals for the Aero India Air Show.

A bit of controversy followed the Indian contingency to Farnborough.

The Indian Navy is again criticizing the Dhruv, according to media reports at press time, saying the naval variant of HAL’s helicopter fails to meet its basic operational requirements. The service, which has a fleet of six Dhruvs, reportedly has decided against ordering more.

The Hindustan Times quoted "a senior navy official" as saying, "The HAL has a long way to go [before it will be capable of undertaking] basic naval roles such as search and rescue (SAR) and communication duties" and that the antisubmarine warfare version falls short of expectations. Specifically, navy officials complained the Dhruv lacks the endurance and payload for naval missions. The service has mounted a worldwide competition for helicopters to replace its aging fleet of Sikorsky Aircraft H-3 Sea Kings.

India’s defense ministry remains committed to the Dhruv as a developing vertical-lift capability for the army and air force. The ministry has allocated $102 million (4.38 billion rupees) for that effort.

Building the indigenous rotorcraft design and manufacturing capability of India is a national priority, and HAL is obviously central to that effort. Still, the navy’s rejection of HAL’s highest-profile helicopter endeavor won’t help efforts to sell that aircraft abroad.

HAL reported victories on the foreign-sales front. In June, it said it had received an order from Peru for two Dhruvs to serve as air ambulances. That would mark the first international civil sale of the Dhruv and prod HAL toward greater international collaboration, since it lacks the expertise to design, produce and install an aeromedical interior for a helicopter. (It is said to be seeking a European partner on that project.) That was followed shortly thereafter by an order from Ecuador for seven Dhruvs for its air force that is valued at roughly $51 million.

International sales of the Dhruv, however, have lagged. While HAL says it has exported Dhruvs to Nepal and Israel, it lost a bid to sell the aircraft to Chile. It had partnered with Israel Aerospace Industries to develop a "glass cockpit" advanced avionics suite for the Dhruv to make it more appealing to the Chilean Air Force. But Bell Helicopter outmaneuvered it in that competition, winning a contract in late 2007 to provide 12 Model 412EPs to that service. It also lost a bid to sell Dhruvs to Myanmar.

HAL originally set 2004 as its target for landing a large export order for the Dhruv. It claims it has received inquires and requests for demonstrations from military forces in 35 nations. HAL says it has delivered at least 75 Dhruvs to the army and 10 are in service with civil operators.

The drive for indigenous capability has left some army and air force leaders feeling short-changed. The Indian government in recent months had said it would pursue a major acquisition of nearly 400 light helicopters. This came after plans to acquire 197 light utility helicopters from Eurocopter (in the form of its AS355C3 Fennec) were scuttled by findings of irregularities in the contract selection. Indian officials subsequently decided to combine that requirement for 197 from the army with the air force’s and other needs, which raised the potential contract size to 384. But the government has now decided to split that tender. Work on the 197 would be bid to international helicopter makers, while 187 would be developed and built by HAL. Army and air force leaders had hoped to get new helicopters faster by acquiring ones based on existing products rather than pursuing development of a new aircraft.

Defence Minister A.K. Antony recently complained to a parliamentary committee that Western manufacturers pursuing helicopter contracts with India were offering "mostly previous-generation tactical systems" on unacceptable terms and conditions. The development of indigenous light helicopters would support his objective of strengthening India’s R&D capabilities.

Some reports say HAL plans to establish a light helicopter development division at its Bangalore site. It proposes increasing capital investments from $23.5 million (1 billion rupees) to $94 million (4 billion rupees) through 2013.

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