Tata Group to invest ₹2,300 crore in Karnataka

Tata Group-owned Air India and Tata Advanced Systems are set to invest ₹2,300 crore in various projects in Karnataka, chief minister Siddaramaiah said on Monday.

This investment by the Tata Group is expected to create 1,650 direct jobs. Out of the total investment, Air India will invest ₹1,300 crore to establish an aircraft maintenance, repair, and overhaul (MRO) unit near Bengaluru's international airport, the state government says. This will directly create 1,200 jobs and indirectly generate more than 25,000 jobs, says Karnataka Minister for Commerce & Industries MB Patil.

Tata Advanced Systems Limited (TASL) is ready to commence three new projects with an investment of ₹1,030 crore, the southern state says. This includes setting up a unit to convert civil aircraft into freighter aircraft for ₹420 crore and building a gun manufacturing facility with an investment of ₹310 crore.

Tata Advanced Systems plans to supply 50% of the 13,000 spare parts required by the company through its gun manufacturing unit to be set up near Bengaluru airport and in Kolar. Due to this, 2,000-3,000 people will get jobs in more than 300 small and medium industries, the state government says.

With the establishment of Hindustan Aeronautics Limited (HAL) in Bangalore as early as 1939, Karnataka has been at the forefront in the field of aviation. 67% of the planes and helicopters required by the defence department are manufactured in Karnataka. In addition, the state contributes 65% to the export turnover of the country's aerospace and defence sector. 70% of the companies in this sector in the country are based in Karnataka.

In March 2023, Airbus awarded a contract to Tata Advanced Systems Ltd. (TASL) to manufacture cargo and bulk cargo doors for the A320neo aircraft family. In addition, Airbus is building the C295 military aircraft Final Assembly Line (FAL) with TASL in Gujarat, the first concrete, large-scale Make-in-India manufacturing aerospace programme in the private sector.

Air India last year placed an order of 470 aircraft from Boeing and Airbus as part of its $70 billion fleet expansion programme. Air India’s orders include 34 A350-1000, six A350-900, 20 Boeing 787 Dreamliners and 10 Boeing 777X widebody aircraft, as well as 140 Airbus A320neo, 70 Airbus A321neo and 190 Boeing 737MAX narrow-body aircraft.

Air India is also gearing up to boost its freight and cargo capacity. The belly capacity of the Air India fleet is expected to grow significantly over the next few years, with the addition of new wide-body aircraft to its fleet and with most aircraft on order set to arrive starting in 2025.

Tata Group took control of Air India after the central government sold its entire stake in the national carrier, including Air India's 100% shareholding in Air India Express and 50% in Air India SATS Airport Services Private. The steel-to-software conglomerate made the winning bid of ₹18,000 crore to bag the airline in October 2021.