India's defence Maintenance, Repair, and Overhaul (MRO) sector is poised for significant growth over the next five years, driven by a combination of increasing demand, government initiatives, and the need for indigenization. Here are the key factors shaping this burgeoning market:

The Indian defence MRO market is projected to reach approximately $3 billion by 2031, up from around $1.7 billion in 2021. This growth represents a compound annual growth rate (CAGR) of about 8.9%.

The Indian Air Force (IAF) fleet is expected to expand significantly, with projections indicating a rise from approximately 713 aircraft to 1522 by 2031. This increase will necessitate enhanced MRO capabilities to maintain airworthiness.

A substantial portion of the current defence fleet consists of older aircraft, such as the MiG-21s, which are over 30 years old. The maintenance needs for these aging platforms will drive MRO expenditures significantly.

Government Policies: Initiatives like the MRO Policy 2021 and other favorable regulations are designed to promote domestic capabilities and reduce reliance on foreign MRO services. This includes rationalizing taxes and encouraging public-private partnerships.

Indigenization Efforts: The Indian government is focusing on indigenizing defense production, which includes establishing joint ventures with Original Equipment Manufacturers (OEMs) for MRO services. This shift aims to build local expertise and reduce costs associated with overseas maintenance.

Current Dependence on Imports: Despite the growth potential, about 80-85% of MRO services are currently sourced from overseas, indicating a significant gap in local capabilities that needs to be addressed.

Skill Shortages: There is a critical need for skilled personnel in the MRO sector. The industry requires collaboration between academia and industry to develop the necessary workforce.

The Indian defence MRO sector is expected to evolve rapidly as domestic players gain experience and capabilities. With increasing air traffic and a growing fleet, the market presents lucrative opportunities for both domestic and international investors. By leveraging government support and focusing on skill development, India can potentially position itself as a regional hub for MRO services in the coming years.