While QuEST Global set up the country’s first aerospace SEZ in Belgaum in November 2009, the State Government has also planned an Aerospace SEZ in 250 acres of land at Devanahalli, near Bangalore International Airport, both these have attracted significant interest. Udyog Mitra, the government’s single window agency for industrial projects and the apex body for SEZ projects, has given clearances to majors like US civil and military aviation companies and the European Aeronautics and Defence Systems or EADS (Rs. 11,700 crore investment); Sobha Nadathur Aerospace Pvt Ltd (Rs 200 crore) and hydraulic equipment manufacturer Dynamatic Technologies (Rs 466 crore). Five proposals worth Rs. 135.98 crores were cleared by the State Level Single Window Clearance Committee (SLSWCC) in June 2009: Systems Controls, G.L. Polyurethane Company Private Ltd., Micron Engineers, Priyaraj Electronics Limited and Pacific Natura Biotech Private Limited are ready to invest in aerospace component units in the aerospace SEZ at Devanahalli.

HAL’s proposal to set up a Rs. 2,095 crore unit in Devanahalli to manufacture aero-engines and provide MRO facilities was approved by the SLSWCC. In January 2010, British engine maker Rolls-Royce Group Plc announced that it is setting up its first joint venture (JV) firm in India in a tie-up with HAL to make civil aero engine components and sub-systems locally for export. The firms will initially invest $4 million (Rs.18.4 crore) each in a unit in Bangalore, through which Rolls-Royce will step up sourcing of components and systems for most of the engines it makes.

Several new ventures have been set up recently in this space:

• Airbus Industries has located its Airbus Engineering Centre in India at Bangalore
• The first public private JV in aircraft design was signed between Mahindra and Mahindra, NAL and the Government of India in 2007.
• In 2008 Boeing signed a collaboration with IISC, Wipro and HCL to develop wireless and other network technologies for aero space related applications.
• Air Works India Engineering Pvt. Ltd. set up in 2009 a MRO facility at Hosur with an investment of $25 million, to carry out ‘C’ checks for various aircraft. In February 2010, it announced the acquisition of a 85% stake in the British company, Air Livery. Air Works aims to utilise the technical know-how of Air Livery to help airlines bring down their maintenance costs.

Other prominent MNCs operating in this sector in Karnataka include GE, Rolls Royce, BAE, Turbo Meca, EADS etc. Many global and large private companies are now building on the base that public sector units like HAL and NAL have laid in Karnataka, most notably in the area of design services, but increasingly also in manufacturing. The state has emerged as a major global design centre, with international majors like Airbus, Boeing etc. having set up their India operations and outsourcing their engineering design requirements either to in-house centres or to third party engineering services partners like Quest, Infosys etc.