Airbus Plans to Increase Sourcing from India to $1.5 Billion as Plane Orders Surge
Airbus, a leading aircraft manufacturer, intends to double the value of parts it sources from India to $1.5 billion in the coming years, according to the company’s India chief. This move comes as the aviation market in India experiences significant growth.
With Indian carriers IndiGo, Air India, and Akasa set to receive hundreds of new planes over the next decade, local component manufacturers supplying parts to aircraft and engine companies will benefit greatly. Currently, Airbus collaborates with over 40 suppliers in India, including Tata Advanced Systems and Mahindra Aerospace, for components and services related to commercial and defense aircraft, as well as helicopter platforms.
Remi Maillard, president of Airbus India and South Asia, announced at the “Wings India” event in Hyderabad that the company expects to double its sourcing from India, increasing from the current $750 million. Maillard emphasized that global aviation is shifting focus to India, and the transformation of the Indian aviation supply chain is just beginning.
India boasts the world’s fastest-growing aviation market, with its airline fleet size projected to surpass 2,000 by 2030, compared to the current 700. The Indian government is also investing approximately $12 billion in the construction of new airports and the refurbishment of existing ones.
Civil Aviation Minister Jyotiraditya Scindia highlighted the remarkable growth of domestic manufacturers in the aerospace sector, stating that every international Airbus or Boeing aircraft contains parts made in India. With both planemakers increasingly sourcing parts from India, Scindia believes the time is ripe for them to consider establishing final assembly lines in the country.
Although assembly represents a small percentage of an aircraft’s total value (around 5% to 7%), it carries significant political weight. While India has been quietly lobbying for jet assembly for years, Airbus and Boeing have primarily focused on increasing sourcing and procurement from the country.
This recent push to enhance sourcing from India coincides with substantial plane orders for both Airbus and Boeing. IndiGo placed a record order for 500 Airbus planes last year, while Air India has ordered 470 planes split between the two manufacturers. Additionally, India’s Akasa Air recently ordered 150 narrowbody planes from Boeing.
As the aviation industry continues to thrive in India, Airbus is positioning itself to capitalize on the country’s growth and emerging opportunities.
Airbus, the European aerospace giant, plans to significantly increase its sourcing from India, aiming to reach $1.5 billion in procurement over the next few years. The decision comes as the company experiences a surge in plane orders, particularly for its popular A320neo aircraft. By doubling its sourcing activities in India, Airbus hopes to tap into the country’s skilled workforce and capitalize on its cost-effective manufacturing capabilities. This move not only strengthens Airbus’ commitment to the Indian market but also supports the government’s “Make in India” initiative, promoting indigenous production and boosting the country’s economy.
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