R.V. Deshpande, Karnataka Minister for Large and Medium Industries and Tourism

By Editor 2016


Exponential Boom in Aerospace Cluster


R.V. Deshpande, Karnataka Minister for Large and Medium Industries and Tourism, pledges to make Karnataka the Aerospace and Defence hub for the entire Eastern world


R.V. Deshpande, Karnataka Minister for Large and Medium Industries and Tourism, urged the Government of India and the aerospace industry to promote Karnataka as the Aerospace and Defence hub, not only of South Asia but of the entire Eastern world. He was inaugurating the Third Aerospace and Defence Manufacturing Show (ADMS), organised jointly by the Society of Indian Aerospace Technologies and Industries (SIATI) and Aeromag Asia in Bengaluru.

Aerospace and Defence and the Civil Aviation sectors are at an inflection point, the minister said. Government of India has once again relaxed FDI norms and has introduced many reforms to propel the sector through the new Defence Procurement Policy announced recently. The Government has also announced the new national civil aviation policy. These initiatives will go a long way in bringing greater participation in the defence sector, providing further fillip to the Make in India initiative.

Experience from across major aerospace clusters of the world suggests that presence of an anchor company, availability of a strong supplier base, availability of a highly skilled talent pool and the quality of the local government support determine failure or success of an aerospace cluster. Globally, there have been many failures and only two or three success stories. Seattle in the United States and Toulouse in France are classical success stories. I proudly say that for all of Asia, there is Karnataka. This cluster in Karnataka has been built over a legacy of 75years and it is unbeatable. If the Mysore Maharaja Jayachamarajendra Wadiyar was magnanimous in granting 700 acres of land absolutely free to Hindustan Aircraft Company, as HAL was initially called, and thus heralding the beginning of aerospace industry in the country, successive state governments have had the foresight to give prominence to this sector which is of strategic importance to our nation.

Karnataka’s close association with aerospace and defence sector continues to this day. Recognising the strategic importance of this sector for our country, last year the Government of Karnataka granted 610 acres of land at Nittur, Gubbi Taluk, in Tumkuru district for HAL’s new helicopter project free of cost. The green field helicopter manufacturing project for Defence requirement has an investment of Rs5,000 crores and an employment opportunity for over 4,000 persons with more indirect employment and scope for larger vendor development. The state government will support the project for speedy implementation.

Over the years many other Defence Public Sector undertakings and R&D institutes have come up in Karnataka which included DRDO, ADA,ADE, GTRE , BEL and many others. These organisations together with the scientific, innovative entrepreneurial spirit of the people of the state created what is today regarded as one of the top technology clusters in the world. Today Karnataka is not only the IT capital of India, much before the acronym IT was coined, Karnataka was and continues to be the aerospace capital of India. The aerospace industry is unique and it is highly capital intensive with cyclical demand and having long gestation periods. Because of hi-tech talent and products which are emanating from Karnataka, the state ranks amongst the top four technology clusters in the world. More than 400 global MNCs established their R&D facilities here.

Karnataka is also the start-up capital of India with over 5,000 start-ups with a share of nearly 40 per cent of all start-ups in India. This combination will ensure that futuristic technologies will merge from Karnataka. Karnataka brought out a Start -up Policy for the first time in the country to create a world-class start-up ecosystem in the state through strategic investment and policy interventions leveraging the robust innovation climate in Bengaluru. A Start-up Council has been constituted under the chairmanship of the Chief Minister of Karnataka to oversee the implementation of the start-up policy.

While our Defence Public Sector undertakings and private sectors have been instrumental in building the aerospace industry, the state government is at the forefront of creating necessary infrastructure for the best eco system for the industry. It is estimated that out of all aircraft and helicopters available with the country’s Defence Services, 67 per cent originate from Karnataka. This is the matter of great pride for anyone who is based in this state.

Among the 2,300 suppliers of HAL, 1,600 are Karnataka-based, that is 70 per cent of the suppliers of HAL. We were the first and the only state  in India to introduce an Aerospace policy, which was drawn up in  consultation with the Aerospace Task Force and the industry. We have developed a world class Aerospace park in Devanahalli which will house the Aerospace Common Finishing Facility and  Aerospace Technology Centre in partnership with National Aeronautical Laboratories and HAL. Both these initiatives are aimed at supporting our SMEs which form the backbone of the Aerospace and Defence industry. The Chief Minister of Karnataka has already announced funds for these projects in last year’s budget.

On the civil aviation side, Bengaluru’s Kempagowda International Airport is India’s third largest airport for passenger and cargo movement, and Bengaluru has the potential to be a major MRO hub. The state government is willing to fully support such an initiative is every possible way.

Government of Karnataka is also constantly and actively engaging with key stakeholders to understand how we can further improve governance to make it easier to conduct business in the state. ‘Invest Karnataka’, a new company is being formed to promote ‘Brand Karnataka’ across the globe, which would involve the best brains in the government and private sector to jointly project and promote investments in to the state. Government has simplified the procedure for permission to purchase agricultural land for industrial activities. Concessions have been granted under the Karnataka Land Reforms Act and Karnataka Land Revenue Act.

In the last three years we have cleared more than 1,550 projects worth in excess of Rs 3 lakh crores. We continue to rank highly on FDI having received the third highest FDI in the country since April 2000. More than 33 per cent of all the FDI (Rs74,753 crores) received by the State in the last 15 years, was received during the last two financial years alone (Rs25,308 crores).

In the recently organised Invest Karnataka 2016, we had focused more on the issue of infrastructure. We are committed to providing top class infrastructure in Bengaluru and across the state. Facilities like road widening, construction of flyovers, pedestrian skywalks, multi-level car parking, grade separators, solid waste management plants etc. are being created through PPP mode. To ease the transportation problem, we have embarked on the Namma Metro Project. The link between Bayappanahalli and Nayandahalli is already operational. Contracts for two reaches of Phase II have been awarded and work will commence shortly. We expect Phase II to be completed by 2020. Project report for construction of elevated roads covering approximately 100 kms, at a cost of Rs18,000 crores, is being prepared and action will be taken soon to construct this project on PPP mode.

Keeping an eye on the future, we have a proactive approach to making it easy to do business in the state. Recently, I had a meeting of stakeholders from various departments to get an update on the progress of reforms we initiated last year. We have received some more suggestions and my officers are examining them constantly. A lot of work is happening behind the scene. However, I urge all to have faith in the Government and support us, Deshpande said.

While congratulating the Society of Indian Aerospace Technologies and Industries (SIATI) celebrating its Silver Jubilee year, and the Aeromag Asia in its 10th anniversary, the minister said both these organisations have been doing an excellent job in promoting the interests of the sector in our country. ADMS, attended by the biggest and the best global aerospace and defence companies, has created an ideal platform for the suppliers consisting of MSMEs to interact and showcase their products and capabilities to the buyers represented by original equipment manufacturers, Defence Public Sector undertakings and Research & Development organisations, the minister said.

Related Article