Can India position itself as the factory of the world ahead of China?
Growth in manufacturing is both a necessity and an opportunity if India wants to reach the projected target of $20 trillion by 2047. Providing the impetus is the aerospace industry in India, which is witnessing a rapid transformation driven by increased demand for parts and services with major global economies seeking to diversify their supply chains.
Airbus, Collins Aerospace, Pratt & Whitney, and Rolls-Royce are increasing their procurement of parts from India, capitalising on the country’s growing capability. This, in turn, is boosting the growth of the emerging aerospace industry and motivating local companies to up their games.
Rolls-Royce plans to double its sourcing from India within the next five years, citing cost advantages and the ability to meet rising local demand.
The growth is part of an Asia-Pacific aerospace surge, with the anticipated revenue in 2024 expected to be 54% higher than in 2019.
India, despite being the largest domestic aviation market, currently accounts for just 1% of the global aerospace supply chain market. However, industry leaders believe that it will be able to capture 10% of the global market by 2033 with this sector predicted to be worth 250 billion USD annually.
During the recent Aero India 2025, India highlighted the expansion of its aerospace sector, which is expected to hit USD 70 billion by 2030.
The Aerospace India Association, the newly formed apex industry body for aerospace design and manufacturing in India, also aims to scale up aerospace exports—currently valued at under USD 2 billion—by tenfold over the next decade.
HOW IS INDIA RESPONDING
As western manufacturers face production caps, and labour shortages, India is increasingly being seen as a reliable cost-effective solution to the supply chain challenges. Companies in India are stepping up their game by riding the wave with Bengaluru-based firms being among the biggest beneficiaries.
Hical Technologies is aiming to double its aerospace revenue to Rs 5 billion (USD 57.57 million) in a span of 3 years. Its current clients include Raytheon, Boeing and other major aerospace firms. JJG Aero, which took 12 years to hit USD 2 million in revenue, has seen a jump to USD 20million in just 6 years. It is focussed on parts for landing, gear, wings, fuselage and motion control systems.
Both companies are now moving from basic engineering, focussing on high-value work-life design, engineering and system integration.
Growth in India’s aerospace sector is further supported by a shift in the country’s role within the global supply chain. Airbus recently awarded its second aircraft door contractor to suppliers in India, which currently contributes over 1 billion euros (USD 1.08 billion) to its supply chain. And this figure is expected to double in the coming years.
Leading global aerospace companies are also boosting their operations in India, with RTX Corp planning to increase its workforce in the country from 1,000 to 8,000 employees by 2027. It is looking to recruit engineers and data scientists to bolster digital and engineering operations. These trends are positioning India as a prominent hub for advanced aerospace manufacturing, with IT-OT integration, smart manufacturing and automation driving innovation within the industry.
Spending on digitalization within the aerospace sector is also anticipated to rise from USD 33.6 billion in 2024 to USD 53.8 billion by 2034, with a significant focus on AI-led design, predictive analytics, and enhanced operational visibility. The digital transformation market in the country is also projected to reach USD 276.95 billion by 2030, expanding at a compound annual growth rate (CAGR) of 20.63%.
The aircraft seating market in the country may also witness an upward swing of USD 797.2 million by 2030, with a CAGR of 13.3% from 2025 to 2030. This growth is primarily fuelled by innovations in lightweight materials, AI-powered smart cabins, and eco-friendly solutions that are redefining air travel experience. Major global aviation companies are partnering with Indian enterprises for developing cutting-edge seating, in-flight entertainment, and noise-cancelling technologies, with the objective to enhance fuel efficiency and lower carbon emissions.
ADVANTAGE INDIA
In the dynamic realm of global aerospace exports, India has emerged as a significant player, bolstered by various competitive advantages that enhance its standing. A primary factor contributing to this is the cost-effectiveness of manufacturing within the country. With operational expenses much lower than those in many other nations, Indian aerospace manufacturers can provide high-quality products at competitive prices, appealing to international buyers seeking to streamline their supply chains.
This element is crucial as global enterprises strive to achieve a balance between quality and cost.
Furthermore, India is home to a highly skilled workforce with numerous engineering institutions producing thousands of graduates adept in aerospace technologies each year. This educated talent pool not only supports ongoing aerospace initiatives but also drives innovation, further solidifying India’s reputation in the international market.
Innovation in technology is a critical tool influencing India’s aerospace exports. Investments in research and development by both the public and private sector, has helped to ensure advancements in technology and bridge any palpable gaps. This focus on innovation also enables Indian producers to develop a wide range of components and systems that adapt to the evolving demands of the aerospace industry, solidifying the nation’s position as a reliable export partner.
GOVERNMENT”S BACKING
India’ has simplified processes related to foreign direct investment (FDI), allowing up to 100% ownership in aerospace ventures and reduced GST on Maintenance, Repair, and Overhaul (MRO) services, which along with the Production Linked Incentive (PLI) incentives, are attracting global original equipment manufacturers and Tier-1 suppliers. The government is also taking steps to enhance the sector with the Civil Aviation Ministry discussing strategies to strengthen local component manufacturing.
Additionally, initiatives such as ‘Make in India’ campaign are strategically aimed at strengthening domestic manufacturing capabilities. The goal is to increase the manufacturing sector’s contribution to GDP from 16% to 25% by 2025, reshaping India’s industrial landscape.
By implementing policies that promote foreign investment and collaboration, the government is also fostering a supportive environment for aerospace manufacturers.
The 5% Integrated Goods and Services Tax (IGST) on all components of aircraft and engines lowers operational expenses and boosts competitiveness of MRO services, which is projected to hit USD 4 billion by 2030. This backing enhances India’s potential to secure and expand its share in the global aerospace market.
The government has also initiated several partnerships with premier research institutions and industries, aiming to create a skilled workforce well-versed in aerospace technology.
Industry experts are of the opinion that India is now also positioned to overcome past challenges like long qualification time and raw material sourcing issues. These along with the skilled workforce and rising manufacturing capabilities, it is primed to become a key player in the global aerospace ecosystem.
