Airbus to Double Sourcing from India Amid Aviation Market Boom

Airbus, the European aircraft manufacturer, anticipates that the total value of parts sourced from India will increase to $1.5 billion in the near future, according to the company's India head. This growth is expected to coincide with the expansion of the world's fastest-growing aviation market. Indian airlines such as IndiGo, Air India, and Akasa are preparing to receive hundreds of new aircraft over the next ten years, which will benefit local component manufacturers who supply parts to aircraft and engine manufacturers. 


Airbus collaborates with over 40 suppliers in India, including Tata Advanced Systems and Mahindra Aerospace, which provide components and services for its commercial, defense, and helicopter platforms. Remi Maillard, the president of Airbus India and South Asia, announced at the "Wings India" event in Hyderabad that the company plans to double its current sourcing from India, which stands at $750 million.  Maillard noted that the global aviation industry is shifting its focus to India, and we are only beginning to see the transformation of the Indian aviation supply chain. By 2030, the total fleet size of Indian airlines is projected to increase from approximately 700 to over 2,000, making India the world's fastest-growing aviation market. 


The Indian government is also investing nearly $12 billion in the construction of new airports and the renovation of existing ones. Domestic manufacturers have rapidly expanded their capacities, according to Civil Aviation Minister Jyotiraditya Scindia, who also noted that aerospace manufacturing is establishing strong roots in India. Scindia stated that every aircraft produced by Airbus or Boeing internationally today includes a part made in India. Given that both aircraft manufacturers are sourcing a variety of parts from India, Scindia suggested that it might be the right time for them to consider establishing a final assembly line for aircraft in the country. While India has been advocating for jet assembly for several years, Airbus and Boeing have primarily focused on increasing sourcing and procurement from the country. 

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Aerospace analysts point out that assembly accounts for only 5% to 7% of an aircraft's value, but it is often perceived as a political victory. This push comes at a time when Airbus and Boeing are receiving large aircraft orders. Last year, IndiGo placed a record order for 500 Airbus aircraft, while Air India ordered 470 aircraft from both manufacturers. Most recently, Akasa Air, an Indian airline, ordered 150 narrowbody aircraft from Boeing.

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