Airbus to Double Procurement from India to US$1.5 billion

DALLAS — Airbus intends to double the total value of its parts sourced from India to US$1.5 billion in the coming years. The planemaker's India chief, Remi Maillard, made this announcement at the Wings India 2024 event in Hyderabad.

According to Reuters, Airbus currently has more than 40 suppliers in India, including Tata Advanced Systems and Mahindra Aerospace, which provide components and services for its commercial and defense aircraft as well as helicopter platforms. However, strong air travel demand in India is at the heart of the increase in sourcing from the South Asian country.

Indian carriers like IndiGo (6E), with its 500-aircraft Airbus order, Air India (AI) and its massive tandem Airbus-Boeing order at DAS2023, and just this week, Akasa Air (QP), with its 150-aircraft Boeing 737 MAX order, are set to receive deliveries of hundreds of new planes over the next decade, which will boost the local component manufacturers that supply parts to plane makers and engine companies.

Airbus Seizes the Opportunity

India is the world's fastest-growing aviation market, with the total fleet size of its airlines expected to grow to over 2,000 by 2030 from about 700 today. The Indian government is also investing close to US$12 billion in building new airports and refurbishing existing ones. It is no surprise, then, that Airbus sees India as a pivotal market. Airbus expects the Indian aviation supply chain to transform and believes that the country has the potential to become an aviation powerhouse.

According to Civil Aviation Minister Jyotiraditya Scindia, there is not a single aircraft produced by Airbus or Boeing internationally today that does not carry a part made in India. He also mentioned that the time was right for Airbus and Boeing to consider setting up final assembly lines for their planes in India.

It's worth noting that Airbus and Boeing have been increasing their sourcing and procurement from India, and assembly represents only a small percentage of a plane's value. However, Reuters' Rishika Sadam and Aditi Shah are keen to note that assembly is often seen as a political win.

Featured image: IndiGo VT-IUV Airbus A321-271NX. Photo: Alberto Cucini/Airways

https://airwaysmag.com/indigo-orders-500-airbus-pas2023/