India's aviation component suppliers stand to gain significantly from a new Indo-US trade deal, offering zero-duty access to the lucrative US market. This move provides parity with European and Asian competitors and is expected to trigger an "exponential" rise in aerospace exports. Boeing has signaled intentions to double its sourcing from India, while major Indian carriers prepare for substantial aircraft orders, boosting the 'Make in India' initiative.
Zero-Duty Access Fuels Export Surge
The landmark Indo-US trade agreement is poised to redefine India's role in the global aerospace supply chain. With zero-duty access to the U.S. market, Indian component manufacturers gain a crucial competitive edge, leveling the playing field with established aerospace hubs in Europe, Japan, and Korea. This development is projected to drive an "exponential" increase in India's annual aerospace exports, which currently stand at approximately $1.5 billion for Airbus and $1.25 billion for Boeing.
Boeing Signals Doubled Sourcing Amidst Mega Orders
American aerospace giant Boeing has indicated a strong commitment to increasing its footprint in India, signaling plans to double its sourcing of components. This expansion is fueled by significant upcoming orders from Indian carriers, including Air India Group and Akasa, which together have placed orders worth an estimated $50 billion for hundreds of aircraft. Boeing anticipates tens of billions more in orders from India in the near future, with IndiGo also reportedly eyeing a substantial wide-body aircraft purchase.
Tariff Relief and 'Make in India' Momentum
Beyond component access, the deal also brings substantial relief through a tariff cut on aerospace parts from 50% to 18%. This reduction offers a significant advantage for India's burgeoning aerospace supply chain. Commerce and Industry Minister Piyush Goyal expressed confidence that India will soon rank among the largest foreign component suppliers globally, reinforcing the government's 'Make in India' policy by incentivizing increased sourcing from the nation. Officials project that Indian carriers may place aircraft, engine, and spares orders totaling $70-80 billion, further solidifying these manufacturing ties.
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