The opportunities provided by “offset” in the defence space in India, estimated at about $10 billion in 2013 by Deloitee’s “Aerospace & Defence Outlook” has enthused Bangalore-based Maini Global Aerospace to look at increasing its turnover from the present $60 million to about $100 million by fiscal 2015.
The company is looking at showcasing its capabilities at the forthcoming “Aero India 2013” event in Bangalore next month to potential customers for firming up joint ventures to tap the burgeoning aerospace and defence (A&D) market in India, given the group derives about 20 per cent of its revenues from India business currently. It’s a business that requires perseverance, according to the company.
The term “offset” in the context of defence supplies, refers to a mechanism where a (foreign) supplier of defence equipment places work for an agreed value with business enterprises of the buying country to offset the buyer’s outlay. India announced its “Defence Offset Guidelines” that came into force from August 1, 2012. One of the objectives of the guidelines is “encourage the development of synergetic sectors such as aerospace and internal security”.
The Executive Director of Maini Group, Gautam Maini, told Deccan Herald: “It is a business with a long gestation period where customer approvals can take about 18-24 months. We have been in business for about four years now and are poised to ride the exponential growth in the aerospace business between 2016 and 2020.”
The company is currently a supplier to many firms in the A&D space including public sector Hindustan Aeronautics Ltd and global firms like Snecma, Eaton, Magellan, Marshall, Avio, MTU and GE. It supplies mechanical components and sub-assemblies, said Maini.
On the pace of offset programmes in India, the company’s CEO, Naresh Palta, said that offsets have lagged behind. “The build up is not at the rate at which it should have been.”
A 2012 survey by advisory firm KPMG titled “Aerospace & Defense 2012 – Industry Outlook” said that 49 per cent of the respondents comprising industry executives saw Asia (excluding China) as a top market.
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