Without More Orders, Boeing Will Not Set Up Assembly Line in India
The aerospace industry in India has shown significant growth in recent years, with an increase in demand for commercial aircraft and greater participation from global companies in the sector. In this context, Boeing, one of the largest aircraft manufacturers in the world, has expressed its interest in strengthening its presence in the country. However, according to recent statements made to Reuters by Salil Gupte, president of Boeing India and South Asia, the company needs more orders before considering establishing a final assembly line for commercial aircraft in the subcontinent.
A Growing Market, But Not Yet Enough
During the Aero India event in Bengaluru, Gupte explained that the volume of aircraft currently purchased by the Indian market is not sufficient to justify the investment in a final assembly plant. According to the executive, “The business case for having final assembly in any region needs to be much larger than what the Indian market is today.”
In an email, Boeing reaffirmed its “strong commitment” to India’s aerospace sector and highlighted that, although it has offered to assemble defense aircraft like the F/A-18 in the country, the scale required for commercial aircraft is significantly larger.
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The Role of the Government and Necessary Incentives
The Indian government has shown strong interest in attracting commercial aircraft manufacturing to the country. In 2023, Prime Minister Narendra Modi stated that India would not have to wait long to see a Boeing designed and manufactured in its territory. Additionally, the civil aviation minister urged Boeing and Airbus to begin local production of commercial aircraft.
However, Gupte emphasized that to expand the aerospace supply chain in India, the government must provide incentives that reduce capital costs for local suppliers. “We have had very frank conversations with the Ministry of Civil Aviation, and they are willing to take those conversations forward with other departments,” he stated.
Orders and Market Expectations
The aviation sector in India is booming, with airlines like Air India and IndiGo placing orders for approximately 1,800 aircraft from global manufacturers. It is estimated that 130 new aircraft will be delivered to the country in 2025, according to data from Cirium Ascend.
In the long term, Boeing predicts that airlines in India and South Asia will add 2,835 commercial aircraft to their fleets over the next 20 years, representing a fourfold increase from current levels.
Boeing in India: Presence and Contribution
Currently, Boeing purchases products and services worth $1.25 billion annually from a network of over 300 Indian suppliers. Additionally, the company employs approximately 7,000 people in the country. Its joint venture with the Tata Group produces fuselages for AH-64 Apache helicopters and vertical structures for 737 aircraft for global customers.
Gupte also highlighted that the final assembly stage represents less than 10% of the total value of an aircraft, noting that “the real business lies in everything that is done before reaching that stage.”
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