Practice Area: Aerospace & Defense

Aerospace Industry in India - Overview

With an annual  growth rate of 18%, the Indian aviation sector is one of the fastest growing in the world. The Indian government's open sky policy led many overseas players to enter

India is the 9th biggest aviation market in the world. In terms of domestic traffic, India is the 4th largest in the world behind the U.S., China, and Japan. India has a total of 454 airports with the Airports Authority of India (AAI) managing 139 of these airports. The AAI controls India’s land and oceanic airspace of 9.6 million square kilometres. The AAI develops and manages airports and also provides air traffic management services and air infrastructure.

Over the last few years, this sector experienced tremendous growth for a number of new air carriers providing domestic services. Starting from a relatively small base, the civil aviation sector in India faces the prospect of significant expansion as the overall economy recovers and India retains the second-highest growth rate worldwide. The number of General Aviation (GA) aircraft is projected to grow to 1,000 by 2020.

As the Indian economy grows more private companies and individuals have started to purchase airplanes. There is scope for growth in the Indian aircraft sales and hence all the major global aircraft manufacturers have a presence in India.

Aerospace Industry in India - Developments

Investment opportunities of US$110 billion are being envisaged up to 2020 with US$80 billion in new aircraft and US$30 billion in development of airport infrastructure, according to the Investment Commission of India.

The Indian Ministry of Civil Aviation is also addressing other important issues that will result in long-to-medium term opportunities for U.S. companies. These opportunities include decreasing the systematic cost in the sector and determining the appropriate mechanism for providing air services to remote and commercially unviable sectors as part of a comprehensive long-term civil aviation policy. The Airport Economic Regulatory Authority (AERA) Bill was passed by the Indian Parliament to ensure that India’s aviation infrastructure meets cost, efficiency, and service targets by making policies consistent with the International Civil Aviation Organization (ICAO) standards. Some notable developments:

• Indian Aerospace companies are growing too. Hindustan Aeronautics Limited (HAL) was ranked 40th in flight International’s list of the top 100 aerospace companies last year.
• Aircraft manufacturing major, Boeing is in the process of setting up the US$100 million proposed Maintenance Repair Overhaul (MRO) facilities in Delhi. Air India is also in the process of launching a Cargo Hub in Nagpur while Deccan Aviation has already started one from the city.
  
• Modernization of Kolkata and Chennai airports with a budget of $900 million.
• Cityside development of major airports. This includes hotels and other passenger related amenities.
• An Aerospace and Precision Engineering Special Economic Zone with a proposed investment of
  US$641 million is coming upin Andhra Pradesh.
• Augmentation of CNS/ATM system including ATFM, implementation of PBN, modernization of MET
  services and networking of civilian/military radars.
  
  

Defense Market in India

Reports from International Strategic Analysis indicate that India is undergoing a major modernization of its military capabilities. This includes a major overhaul of the country's air force, which is seen as being outdated at present.

According to the Confederation of Indian Industries (CII) estimates, total defense spending over acquisition and purchases for the next five years would be approximately US$45 Billion and has the potential to contribute substantially to the Indian economy.

Links

Ministry of Civil Aviation: www.civilaviation.nic.in
Directorate General of Civil Aviation (DGCA) www.dgca.nic.in
Bureau of Civil Aviation Security (BCAS) www.bcasindia.nic.in
Indira Gandhi Rashtriya Uran Academy (IGRUA) www.igrua.gov.in
Airports Authority of India (AAI) www.airportsindia.org.in
Aviation Cooperation Program (ACP) www.acp-india.com

Sources: US Commercial Service, Media, Proprietary Reports, International Strategic Analysis