NEW DELHI — India's In a major development in India’s private sector, Reliance Defence and Aerospace Pvt. Ltd., a newly formed subsidiary industrial group Reliance Infrastructure, owned by Anil Ambani, has forged a partneredship with Russian Helicopters and Rosoboronexport of Russia to manufacture Ka-226 helicopters in India, said an executive of parent company Reliance Infrastructure.

An tie up agreement recently was been signed last week between Reliance Defence and Aerospace, Pvt. Ltd., a subsidiary of Reliance Infrastructure, and Russian Helicopters and Rosoboronexport to manufacture Ka 226 helicopters in India, said an executive of Reliance Infrastructure but gave no details of the equity arrangement

India has already given gave a firm order to Russia, on nomination basis, to manufacture 200 Ka-226 helicopters for the Indian military. The order could increase because India has a need for more than 400 light utility helicopters in the Ka-226 category.

Despite the arrangement, Russia is not committed to it is not a commitment that Russia will manufacture Ka-226 only at Reliance facilities, said a Russian diplomat. adding that Several parameters pertaining to transfer of technology, cost and creation of infrastructure still need to be worked out, the diplomat said. with an Indian entity to manufacture Ka 226 helicopters.

After India canceled a global tender last year to purchase 197 light utility helicopters, Russian President Vladimir Putin, during talks in December with the Indian prime minister, in December, 2014 offered co-production of Ka-226 light utility helicopters under India's "Buy and Make" category, under which includes transfer of technology. will be done by an Indian entity.

A n Executive of Reliance Infrastructure executive said he is they are optimistic production will occur in India because to manufacture Ka 226 helicopters in India adding that last month his company was allotted 289 acres of land in the state of Maharashtra to set up an aerospace facility for where the proposed helicopter facility which will also house the Ka-226 production facility.

However, some analysts are skeptical whether Reliance Defence and Aerospace, Pvt. Ltd., which has no previous experience in manufacturing helicopters, will be able to produce the Ka-226. helicopters at a brand new facility.

"It [manufacturing helicopters] is a highly complex process; [you will have to] develop skills for a helicopter final integration line to be set up and that requires design, engineering, manufacturing and integration process skills to be acquired, trained and mastered. This is a time-consuming and capital intensive process. Some experts feel it is even more complex than the aircraft manufacturing. Thus it would be a huge challenging task," said an executive of India’s private sector major Larsen & Toubro. (L&T).

An executive of the Tata Group, of industries, which is also exploring the possibility of manufacturing helicopters in India, said,: "Very difficult, but with proper transfer of technology it can be done. After all, everybody has to start sometime,."

It could take about 10 years before a company starts manufacturing helicopters in India, he added.

Vinod Kumar Narang, retired Indian Air Force air vice marshal, said manufacturing might be possible within five to six years. is optimistic that it is possible to manufacture the Ka 226 helicopters in 5to 6 years time.

"In India , we have enough talent, including ex-Indian Air Force (IAF) or Hindustan Aeronautics Ltd. [HAL] officials who can be trained to manufacture this type of helicopter. Theoretically it is possible for Reliance to manufacture helicopters from scratch. But practically it may not be possible due to constraints like land, finance, timelines, electricity, etc," he said.

Currently, s State-owned HAL is the monopoly military aircraft manufacturer and the Air Force IAF has been asking would like the MoD to create a private sector competitor. to it in the private sector.

Vivek Rae, MoD’s former director general of procurement, said, "Reliance is likely to be more dynamic and flexible than public sector units and may also be more cost efficient," said Vivek Rae, MoD’s former director general of procurement. 

Rae added that it should be possible for Reliance should be able to produce the helicopters at a lower cost. "Labor costs are very high in HAL. It is cheaper to import Russian Su-30 aircraft from Russia than manufacture them in HAL."

Amit Chowshish, former MoD ’s former additional financial adviser, said he is optimistic Reliance can manufacture helicopters from scratch.

"It cannot be answered hypothetically how long it will take for a new company to start manufacturing from scratch, but putting together an assembly line is more of a managerial challenge. The new entity may decide to leverage the capabilities of the existing medium and small enterprises or even big companies, to become system integrators."

HAL is still confident that it will partner in making the Ka-226, a HAL executive said. "HAL has been manufacturing helicopters for over three decades and we certainly have capability to build any kind of helicopter."

He added that HAL already has the Light Utility Helicopter program underway, and "our helicopter will be certainly much cheaper than the Reliance build,"  (LUH)," he added.

India and Russia have still to work out fine details on the co-production of the Ka 226 involving the price and transfer of technology and a final decision on the Indian partner is still awaited.