IT firms target $8bn aviation engg market

Bangalore: Big and small domestic IT firms are busy positioning themselves to snap up the $8 billion market opportunity that the aerospace sector has created.
A recent Booz Allen Hamilton report states India’s aerospace offshore engineering services market, excluding the defence offset opportunities, has the potential to reach about $4 billion by 2020. This could bring an additional $4 billion opportunities in the form of offset requirements, during the same period.
The figures are arrived at from the hundreds of defence orders and the diktat of the offset regulation in this regard. If an order by a defence entity or state-owned civilian carrier to a foreign supplier is worth at least Rs 300 crore, the supplier will have to offset (reverse purchase) at least 30 per cent of the total purchase value by either procuring components by partnering with local firms or by availing of engineering services, rules the offset policy.
Engineering services revenue for IT leaders like TCS, HCL Technologies, Satyam, Wipro, Infotech Enterprises and emerging ones like QuEST and CADES is in the $15-$60 million range.
TCS, claims that 13 per cent of its total engineering services revenue (about $40-45 million) comes from aerospace engineering. HCL Technologies, says 6 per cent of its total revenue i.e. $60 million, comes from aerospace practices.
20/02/07 Bibhu Ranjan Mishra/Business Standard

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Categories: foreign feb 2007, General Aviation feb 2007, New feb 2007