Soaring High: Exploring India’s Opportunities in the Aerospace Industry
India’s civil aviation sector has soared to new heights, exemplifying a remarkable growth trajectory that mirrors the nation’s dynamic economic landscape. With a strategic focus on modernization, infrastructure development, and regulatory reforms, India’s aviation industry has transformed into a global powerhouse, witnessing unprecedented expansion and fostering connectivity across the subcontinent and beyond. The rise of cutting-edge technology, a burgeoning middle class, and a proactive government approach have collectively propelled India’s aviation sector into a beacon of progress, setting the stage for continued excellence in the skies.
India is currently the third largest aviation market in the world, behind only the United States and China, according to the Ministry of Civil Aviation. Ove the last decade, India has seen a rapid rise in domestic travel; the total number of domestic passengers has increased more than 100% from 2014 to 2020 to reach 143 million in 2020. India has also seen a nearly 50% increase in international passengers, from 43 million to 64 million over the same period, largely driven by tourism and trade development.
Opportunities for Foreign Companies
Maintenance, Repair & Operation: As per the Niti Aayog report 2021, India’s MRO market is at a nascent stage with a market size of US$1.7B in 2021. However, the MRO market is expected to reach US$4B by 2030, registering a CAGR of 8.9%— well above the world average of 5.9%. Despite being one of the largest civil aviation markets globally, India has limited full-scale aircraft manufacturers and MRO players to cater to its growing demand. This gap in supply and demand coupled with favorable government policies present great opportunity for new players in the MRO sector.
Components and equipment manufacturing & distributions: Having seen a nearly two-fold increase in fleet size which stood at 723 in 2023 from 400 in 2014 with the strong order book of 1100 aircrafts in for 2-3 years, the demand for aero components, parts and auxiliaries are ever increasing, both for civil aviation as well as defence. The majority of aero parts are imported in India to cater the current demand, primarily from the United States and Germany. Billion-dollar expansion projects from leading aircraft manufacturers Boeing and Airbus in India are expected to boost the demand manifold.
The government of India has a vision to make India into an aerospace hub for the world. Several policy initiatives, such as MRO Policy 2021 and India Civil Aviation Policy 2016— which allows foreign companies to participate in various business conducts in India’s aerospace sector—have improved the ease of doing business for foreign companies in the country. The government has also liberalized its FDI policy to permit 100% FDI in major aerospace sub sector such as MRO for maintenance and repair organizations, flying training institutes & technical training institutes, ground handling services, aero parts & components, non-scheduled air transport services, and helicopter services and seaplanes.
India’s strategic geographical location places it at the crossroads of international air routes, making it a crucial hub for aviation and aerospace activities. The country’s proximity to major global markets, availability of talent pools and robust demand position it as an ideal location for manufacturers, suppliers, and service providers looking to establish a strong presence in the global aerospace industry. As the industry continues to evolve, the opportunities for collaboration, innovation, and sustainable growth are boundless, ensuring a bright future for India’s aerospace sector.
Authored by
Anuj Kumar is Senior Consultant based in India.
Comments