Small steps to Mars are a big leap for Indian companies

Reuters

* Go-it-alone ethic, local engineers give a boost todomestic firms

* Space work should help Indian companies win defence,aerospace bids

* Current contract values not high, but spinoffsvaluable-L&T exec

By Shyamantha Asokan

NEW DELHI, Dec 9 (Reuters) - Indian companies that builtmost of the parts for the country's recently launched Marsmission are using their low-cost, high-tech expertise in frugalspace engineering to compete for global aerospace, defence andnuclear contracts worth billions.

India's Mangalyaan spacecraft was launched last month andthen catapulted from Earth orbit on Dec. 1, clearing animportant hurdle on its 420 million mile journey to Mars andputting it on course to be the first Asian mission to reach thered planet.

The venture has a price tag of just 4.5 billion rupees ($72million), roughly one-tenth the cost of Maven, NASA's latestMars mission. Two-thirds of the parts for the Indian probe androcket were made by domestic firms like Larsen & Toubro, the country's largest engineering firm, Godrej &Boyce, and state plane-maker Hindustan Aeronautics Ltd.

While such companies have a long way to go before they canattract big business in the commercial space sector, years ofwork on home-grown space projects are helping them carve out aniche as suppliers of precision parts for related sectors likedefence, aeronautics and nuclear energy.

Those firms with proven space know-how will find themselveswith the advantage as India, the world's biggest arms importer,shells out $100 billion over a decade to modernise its militarywith the country favouring local sources.

India in June strengthened a defence policy stipulating thatlocal firms must be considered first for contracts and foreigncompanies winning contracts worth more than 3 billion rupeesmust "offset" at least 30 percent of the deal's value in India.

"We think over the next two to three years we will be ableto convert this into a profit centre," said S. M. Vaidya, thebusiness head of Godrej's aerospace division, which made therocket's engine and fuel-powered thrusters for the Indian Marsprobe.

Thanks to the space work, the company's engineers now knowhow to handle the specific metal alloys and the high-precisionwelding needed for aircraft and missiles as well as rockets,Vaidya added.

Godrej has worked with India's space agency for almost threedecades and in recent years started making engine parts foraircraft makers Boeing Co, the Airbus unit of EADS and Israel's state-owned Rafael Advanced DefenceSystems Ltd. It is in talks with Boeing to make parts foraircraft frames.

HOME-GROWN, GO IT ALONE

India launched its domestic space program 50 years ago andhad to develop its own rocket technology after Western powerslevied sanctions in response to a 1974 nuclear weapons test,resulting in a "go it alone" development mentality.

The Indian Space Research Organisation, or ISRO, has workedto keep import costs low by designing most of the parts for itsprogramme that are then outsourced to the domestic privatesector.

ISRO must still import some metal alloys used in the spaceprogramme that it then gives to its contractors and Indiancompanies also must buy some of the machinery needed to make theparts from Europe and Japan.

India's heavy reliance on domestic companies for its spaceprogramme allows it to tap homegrown technicians and engineerswho earn half as much as those in the West. Starting salariesfor aerospace engineers in India are at most $2,000 per month,according to Indian recruitment consultancy TeamLease. The samerole in the United States brings in about $5,300 on average,according to the National Association of Colleges and Employers.

"The commercial value of the business with ISRO is not high,it is the spin-offs that are valuable," said M. V. Kotwal,president of the heavy engineering division at Larsen & Toubro,which has made $5.7 million in parts for ISRO in recent years.

L&T has also supplied $240 million worth of parts so far toITER, an inter-governmental science experiment that is buildinga thermonuclear reactor in southern France.

Godrej earlier this year won a deal to build a frame for theworld's largest optical telescope in collaboration withUniversity of California, the California Institute ofTechnology, and the Association of Canadian Universities forResearch in Astronomy.

Walchand Nagar Industries, a Pune-headquarteredcompany that made 100 million rupees ($1.6 million) worth ofparts for India's Mars rocket, said the project helped it wincontracts worth double that amount for a state-run nuclear plantin the western state of Gujarat.

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