Global aerospace firms are increasingly turning to India as a strategic manufacturing and sourcing hub amid ongoing supply chain disruptions in the West. This shift is driven by several key factors:

Key Factors Driving The Shift To India

Supply Chain Disruptions: The global aerospace industry has faced significant challenges due to labour shortages, geopolitical tensions, and logistical bottlenecks, including semiconductor shortages and port congestion. These disruptions have highlighted the need for diversification in supply chains.

Cost Competitiveness And Skilled Workforce: India offers a large pool of skilled engineers at lower operating costs compared to traditional aerospace hubs like the U.S. and Europe. This makes India an attractive destination for cost-effective manufacturing.

Government Policies And Initiatives: The Indian government has implemented policies such as the Production-Linked Incentive (PLI) scheme and eased foreign direct investment (FDI) norms to attract foreign investment and foster domestic manufacturing capabilities in the aerospace sector.

Growing Demand For Aerospace Equipment: India's expanding defence sector and rapidly growing civil aviation market are driving demand for aircraft and aerospace equipment, further solidifying its role in the global aerospace industry. JJG Aero, in Bangalore's industrial hub, took 12 years to hit $2 million in revenue but soared to $20 million in the last six, said CEO Anuj Jhunjhunwala.

Major Aerospace Firms Investing In India

Airbus: Has established strong ties with Indian suppliers and aims to increase its sourcing from India significantly. Every Airbus commercial aircraft now includes components made in India.

Rolls-Royce: Plans to double its sourcing from India within the next five years, citing India as the "best cost market" for addressing supply chain challenges.

Boeing: Has partnered with multiple Indian firms to manufacture parts for its commercial and defence aircraft.

Collins Aerospace And Pratt & Whitney: Are also expanding their sourcing from India, contributing to the growth of the local aerospace sector.

Impact On India's Aerospace Sector

Indian aerospace firms like Hical Technologies and JJG Aero are experiencing rapid growth as they become critical suppliers for global aerospace manufacturers. The sector is evolving beyond basic manufacturing to include high-value work in design, engineering, and system integration. India aims to capture a larger share of the global aerospace supply chain, with projections suggesting a 10% market share by 2033.

Reuters