Tata Sons will not be forced to write off investment in its aircraft engines, and will not lose any of its investments in the sector, said the company’s chief executive officer, Sunil Goyal.
Tata Sons is a major shareholder in Birlas and the two have been working on an aircraft engine for more than a decade.
The Tata group is expected to announce the investment in the engine sometime in the next few weeks, and the company has set a target of $500 million to build a small-engine airliner in India.
The company is also planning to develop a high-speed passenger plane for the Indian market.
The aircraft engine business is in a boom period, as the aviation industry is witnessing a resurgence after years of decline.
A number of companies are pursuing aircraft engine development, including Hindustan Aeronautics Limited, the country’s largest private aerospace company, and its Indian subsidiary, Hindustani Aviation.
The Hindustans subsidiary has been working with Tata Sons on the engine project for more and more years, and Tata Sons has been keen to invest in the business.
The engine is currently being built by a consortium led by Hindustania Aviation.
Birla’s investment in aircraft engines was one of the key investments that was made in the company in 2015.
The investment, however, is expected in the short-term, said Mr Goyal, who was India’s top business minister at the time.
“The engine business in India is going through a phase where investments are coming from other companies,” he said.
“So in the longer term, the investments are in the engines and not the aircraft engine.”