Global Aerospace Firms Turn to India Amid Western Supply Chain Crisis

The global aerospace industry is facing significant challenges due to supply chain disruptions, geopolitical tensions, and the need for diversification. In response, major aerospace firms are increasingly turning to India as an attractive destination for manufacturing and supply chain operations. This shift is driven by several factors that make India an appealing alternative or supplementary location for aerospace manufacturing and supply chain operations.

Cost-competitiveness and skilled workforce: India offers a large, English-speaking engineering talent pool with significantly lower operating costs compared to traditional aerospace hubs like the U.S., France, and the UK. This cost-effectiveness and skilled workforce make India an attractive destination for aerospace manufacturing and services. For instance, Boeing's facility in Bengaluru is now a major hub for manufacturing advanced composite floor beams for the company's commercial aircraft programmes, contributing to cost savings.

Government policies and initiatives: The Indian government has implemented several policies and initiatives to attract foreign investment and foster domestic manufacturing capabilities in the aerospace sector. These include:

* The Production-Linked Incentive (PLI) scheme for the aerospace and drone industries, offering financial incentives to companies that establish manufacturing facilities in India.
* Easing foreign direct investment (FDI) norms, allowing 100% FDI in the aerospace sector under the automatic route.
* The "Make in India" campaign, which aims to create a robust ecosystem for aerospace manufacturing and reduce reliance on imports.

Growing demand for aircraft and aerospace equipment: India's defence sector is expanding, leading to a surge in aircraft and aerospace equipment demand. Additionally, the country's civil aviation sector is one of the fastest-growing in the world, with projections of over 500 million domestic and international air travelers by 2030. This growing demand contributes to the country's increasing role in the global aerospace industry.

"China+1" strategy: In the wake of supply chain disruptions caused by the Covid-19 pandemic, geopolitical tensions, and concerns over excessive reliance on a single country, many multinational corporations have sought to mitigate risks by diversifying their supply bases. India, with its vast market potential, improving infrastructure, and business-friendly policies, has emerged as a compelling alternative or supplementary destination for aerospace manufacturing and supply chain operations.

In conclusion, the increasing investment in India by global aerospace firms presents significant opportunities for the development of the domestic aerospace industry. These opportunities include skill development, technology transfer, fostering a thriving ecosystem of domestic suppliers, and government initiatives and policy support. By leveraging these opportunities, Indian companies and workforce can contribute to the growth and success of the aerospace industry in India.