Indian Aerospace Manufacturing On The Rise

This shift is a response to recent supply chain disruptions, and a testament to India's growing design, engineering and system integration capabilities. With its robust manufacturing ecosystem, skilled workforce and competitive costs, India is positioning itself as a key player in the global aerospace supply chain.

From Challenges To Opportunities

Historically, India faced several barriers that limited its role in the global aerospace sector. Geographical distance from key markets, regulatory complexities and a nascent domestic aerospace industry posed challenges for companies looking to integrate Indian suppliers into their supply chains.

However, these challenges have evolved into opportunities, thanks to government initiatives, private sector investments and an increasing appetite for advanced aerospace manufacturing within the country.

According to a market study by Grand View Research, India's aerospace industry is poised for significant expansion, with a projected revenue of US$ 21.48 billion by 2030 and a compound annual growth rate (CAGR) of 6.8 per cent from 2024 to 2030. These figures indicate that India's role in the global aerospace supply chain will only strengthen in the coming years.

According to a survey by PwC and CII, India provides cost savings of 15-25 per cent in manufacturing activities, and an additional 10-20 per cent through local sourcing of raw materials. The survey said India offers cost benefits across various segments of the aerospace value chain. 

Several industry leaders, including Huw Morgan, Senior Vice-President for Aerospace Procurement at Rolls-Royce, have highlighted this transformation, stating that India has been able to crack the supply chain challenge. Rolls-Royce is among the many global aerospace giants that have ramped up their procurement activities in India, recognising its potential to deliver quality aerospace components at competitive prices.

Exponential Growth

Aerospace component manufacturers in India, particularly those based in Bengaluru — a city widely regarded as India's aerospace capital — are experiencing exponential growth. Companies such as Hical Technologies and JJG Aero are leading the charge.

Hical Technologies, for instance, has set an ambitious target of doubling its aerospace division revenue to Rs 5 billion (US$ 57.57 million) within the next three years. Similarly, JJG Aero has witnessed a meteoric rise in revenue, growing from US$ 2 million over 12 years to US$ 20 million in just six years.

Analysts have said that there is a fundamental change in perception — Indian aerospace firms are no longer just contract manufacturers; they are now seen as strategic partners capable of delivering high-quality products and services at scale.

Moving Up The Value Chain

Beyond manufacturing, Indian aerospace companies are steadily moving up the value chain by expanding their design, engineering and system integration capabilities. Airbus, one of the world's largest aircraft manufacturers, has been actively working with Indian suppliers, awarding them multiple contracts. Today, every commercial Airbus aircraft contains components manufactured in India.

Michel Narchi, an executive at Airbus, sheds light on India’s growing contribution to the company’s supply chain: “India contributes more than € 1 billion currently in our overall supply chain, and we expect this contribution to double soon,” he said at the Global Investors Meet in Bangalore recently.

This upward trajectory reflects the growing trust that global aerospace giants place in Indian manufacturers, reinforcing India’s status as a reliable supplier of critical aerospace components.

Fueling Growth

The Indian government has played a crucial role in fostering the growth of the aerospace sector through initiatives like 'Make in India.' These policies encourage domestic production, incentivise foreign investment, and promote greater private sector participation in aerospace manufacturing.

The civil aviation ministry has also focused on boosting component manufacturing by increasing local sourcing of raw materials such as aluminium and titanium.

According to Srinivasan Dwarakanath, Director-General of the Aerospace Industries Association (AIA), local sourcing will reduce costs and lead to the certification of aerospace designs developed by Indian suppliers.

This shift is expected to add significant value to the country’s aerospace industry and strengthen its global positioning. The AIA estimates that India could capture up to 10 per cent of the worldwide aerospace supply chain market within the next decade, a significant leap from its current contribution.

He said the current product and design manufacturing exports are worth around US$ 10 billion, which will increase to around US$ 20 billion in a decade. 

Aravind Melligeri, Chairman of Aequs, a key aerospace supplier, describes the post-COVID era as an “inflexion point” for the industry. With massive aircraft orders from Indian carriers like IndiGo and Air India, there is a strong demand for maintenance, repair, and overhaul (MRO) services, further reinforcing India’s role as a critical hub for aerospace activities.

Global Aerospace Ecosystem

The scepticism surrounding emerging economies' ability to compete with established players in high-precision industries like aerospace is fading. The rapid industrialisation of countries such as China and South Korea has provided a blueprint for India’s aerospace ambitions.

Today, Bengaluru and other Indian cities are emerging as hubs for component manufacturing and the innovation and development of entire aerospace systems.

According to the International Centre for Trade Transparency and Monitoring, Indian suppliers, especially those in Bengaluru, are experiencing remarkable growth as they ramp up production of critical aerospace parts such as landing gear, wings, and motion control systems.

Indian aerospace capabilities have evolved significantly, allowing companies to offer cutting-edge solutions and become indispensable partners in the global supply chain.

Key Growth Drivers

Several factors are fuelling India's rise in the aerospace sector:

• High domestic demand: India’s rapidly growing aviation market, with increasing passenger traffic and expanding airline fleets, drives demand for locally manufactured aircraft components and MRO services.
• Offset policy: India's defence procurement policies mandate foreign aerospace companies to invest in domestic production, leading to a surge in collaborations and joint ventures.
• Cost advantage: India provides qualified, experienced and cheap labour at every level of the production process.
• Talent base: With a strong engineering talent pool, India is well-positioned to support the growing demands of the aerospace sector.
• IT and digital capabilities: India's expertise in software development and digital technologies provides an edge in advanced aerospace systems such as avionics and predictive maintenance solutions.

As the demand for air travel continues to rise globally, the aerospace industry is increasingly looking to India for support. The country's well-established manufacturing infrastructure, skilled workforce, and cost competitiveness have made it a preferred destination for sourcing critical aircraft components.

Indian aerospace firms are stepping up to the challenge, manufacturing high-precision parts and contributing to design, engineering and system integration.

(The writer is a senior journalist who was earlier Business Editor at The Federal and associate editor with Hindu Businessline)