Aviation and Aerospace to India

Trends and opportunities

The market

India is one of the largest and fastest growing aerospace markets in the world.

With rising passenger traffic and increasing military and defence expenditures, India is expected to become the third largest aerospace market in the world by 2020, after China and the United States. (Source: Confederation of Indian Industry, January 2019)

There are joint venture and collaboration opportunities for Australian aviation and aerospace organisations in:

  • Pilot training for narrow body planes and drones (remotely piloted aircraft)
  • Avionics, precision machining of components, composite materials and accessories both in the civil and military aviation sectors
  • Joint research and development in cyber security; space technologies; integrated intelligence; surveillance and reconnaissance; marine warfare and armed unmanned aerial vehicles.

In order to simplify the regulations governing Foreign Direct Investment (FDI) and to position India as an attractive investment destination for international investors, the Government of India raised FDI limits from 26% to 49% in the defence sector, with the potential for 100% FDI subject to “modern technology” transfer and government approval.

Global aerospace majors like Airbus and Boeing have established a manufacturing footprint in India through joint ventures with local businesses.

Partnering with an Indian organisation can be an effective market entry strategy and assists to reduce the cost of service delivery.

India is a significant aviation and aerospace market in Asia with strong growth projections for the next 20 years made by Boeing and other global aerospace majors. Operating conditions and ease of doing business is also improving across India.

These factors drive international aerospace and aviation companies to enter the Indian market.


Civil Aviation

India’s civil aviation sector has been consistently registering double digit growth for the last few years.

Air passenger traffic is expected to grow to 442 million by 2035 from 104 million domestic and 55 million international passengers in 2017. (Source: Federation of Indian Chambers of Commerce & Industry, January 2019)

This growth is primarily fuelled by an improving economic environment, a growing middle class, growth in cross-border trade, capacity expansion of low-cost carriers, development of world-class airports, increased FDI in domestic airlines, and heightened focus on regional connectivity within India.

The Indian market is growing rapidly, with Boeing forecasting the delivery of up to 2300 new aircrafts through to 2037 in India. This is in turn creating significant demand for skilled pilots and aircrew. The Centre for Aviation predicts Indian carriers will require over 10,000 captains alone over the next decade. (Source: Centre for Aviation, India The Economic Times, July 2019)

India’s current fleet is a mix of jet aircraft like the Airbus A320 and Boeing B737 operating alongside smaller aircrafts like ATR, Bombardier and Beechcraft. Turboprop aircraft are particularly important in India, with the Government of India’s regional connectivity scheme aiming to use these aircrafts to extend air travel to a wider number of Indians. While Indian carriers are deploying turboprops in large numbers, there are significant pilot shortages in this sub-sector.

Australia’s reputation for strong training standards and predicted Indian pilot shortages may present an opportunity for Australian businesses with skills and experience in this area to enter the Indian market.

The Directorate General of Civil Aviation (DGCA) is the regulatory agency in India that grants commercial pilot licences and type rating certification to pilots for specific aircraft categories. DGCA requires operators with more than 20 aeroplanes of one type to own or lease flight simulators.

DGCA also has a regulatory framework for remotely piloted aircraft systems (drones) operation, including for commercial use. A DGCA licence is required to operate a drone over two kilograms. Licenses are obtained through training with a DGCA-approved flying training organisation.

CAE Simulation Training Private Limited, a joint venture between Indian based Inter Globe Enterprises and CAE Inc., and Flight Simulation Technique Centre (FSTC), an independent pilot training service provider in India are among the leading players in this segment with over one third market share.

As Australia remains a hotbed for Beyond Visual Line Of Sight (BVLOS) testing, Australian businesses are well placed to enter the Indian drone market. (Source: Frost & Sullivan, Global Commercial UAS Market)

Military Aviation

India’s defence expenditure is growing, with the Indian Air Force alone having an expenditure forecast of about $A210 billion on acquiring aircraft and aero engines in the next 15 years. (Source: Confederation of Indian Industry, January 2019) India’s preferred partners are also changing. India has moved away from Russia as its major supplier, with the United States (US) and Israel now major suppliers of defence equipment to India.

The Indian Armed Forces’ exposure to international equipment is also being enhanced by its growing global presence. India conducts annual joint military exercises with the US, Japan, Australia, Singapore, Russia and the UK, including the regular AUSINDEX bilateral maritime exercise. These activities are assisting India to grow its interoperability with other forces, and are driving greater interest in international technologies and those defence industries that supply them.

India has established offset requirements and is seeking to further grow its own industrial capabilities through its ‘Make in India’ policies. However, the need for international businesses to enter the Indian market and partner with Indian companies will continue for the foreseeable future. While India’s defence industry has been largely dominated by state owned entities, there is increasing participation of private sector Indian conglomerates like Mahindra Group, Larsen & Toubro and Tata Group. This will in turn open new opportunities for Australian businesses to enter the supply chains of these companies as they are often more open to considering international expertise and capabilities.

Australia and India’s defence ties are growing, boosted by the signing of a bilateral Framework for Security Cooperation in 2014 and more frequent bilateral and multilateral training exercises. 
This growth supports Australian defence industry’s engagement with their Indian counterparts.

Pilot Training

Australian providers have opportunities to collaborate with Indian organisations for pilot training of jet aircrafts like A320 and Boeing 737’s, small aircraft (mainly turboprops) and drones.
Australian businesses enjoy a good reputation in cadet pilot training for airlines in India. 100% FDI is allowed in India for setting up flight training institutes. One of the tested partnership models has been for an Australian flight training institute to partner with Indian airline carriers and provide training for its cadet pilots. The training can be conducted at the training facility in Australia, mentored by an Indian airline operator. Successful candidates receive a licence from the Civil Aviation Safety Authority’s (CASA). These cadet pilots can then convert the flight licence on their return to India through the DGCA at extra marginal cost.

Indian training centres are reaching full capacity on their simulators, thus pushing them to collaborate with training operators across the world. Australian organisations in this segment can benefit from this opportunity, as Indian airline operators endeavour to ensure that their cadets are exposed to the best pilot training systems and facilities.

Defence Manufacturing

Successful delivery of Indian procurement contracts require significant scale and presence in the Indian market. Australian suppliers with specific capabilities may therefore wish to enter the market through the supply chains of global primes, such as those participating in the Global Supply Chain Program, or leading Indian primes or conglomerates. In particular, there are opportunities for Australian businesses to collaborate with Indian businesses, for example through joint ventures in the areas of electronics, precision machining and composite materials.

US-based primes are also expanding their presence in India. Australia’s existing engagement with these organisations, means that Australian firms are well positioned to leverage from this expansion. For example, Lockheed Martin is considering setting up an F-16 assembly line in India. 

Australian businesses may also wish to partner directly with Indian businesses to leverage established networks, local understanding and meet offset requirements. However, as awareness of Australian capabilities are limited, Australian companies may need to be proactive in promoting their capabilities to India and explaining how they can assist India’s defence modernisation programs.

Australian and Indian defence manufacturers and research institutions can collaborate on areas such as cyber security; space technologies; integrated intelligence; surveillance and reconnaissance; marine warfare and armed unmanned aerial vehicles.

The Indian Defence Research and Development Organisation (DRDO) is working on new generation technologies in surveillance systems; detection sonar; information and communication systems; directed energy systems; and detectors. There is an opportunity for Australia and India to collaborate and work on joint projects in some of these areas, with the involvement of academia, industry and the start-up community forming an ecosystem for enhanced engagement.

Marketing your products and services

Market entry

Key strategies that should be considered when marketing your services and products in India includes:

  • Targeted market visits to potential customers and partners are effective for initial market development. Austrade can assist and facilitate access to market and identify local partners.
  • Partnering with Indian companies or entering the market via an established supply chain. Austrade is working closely with major primes such as Airbus, Boeing, Rolls-Royce and Pratt & Whitney to access their global supply chain. Many of these Original Equipment Manufacturers conduct their sourcing from regional headquarters and are looking to the Australian aerospace sector to provide expertise and technologies to complement India’s capabilities.

When targeting the Indian market, some of the considerations include:

  • Investing in-country, either through local partnership or establishing a domestic subsidiary is preferred
  • Carrying out due diligence on Indian partners and organisations
  • Negotiating a non-disclosure agreement prior to teaming arrangements
  • Collaborating, innovating and co-creating – regardless of whether you are a start-up, small and medium enterprise or a multinational corporation.

Links and industry contacts

Ministry of Civil Aviation

Ministry of Defence

Directorate General of Civil Aviation

Airports Authority of India


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