India seeks to shift global aerospace manufacturing activity to home shores
02 Apr 2008
New Delhi: India may be consciously seeking to court Western aerospace companies to locate manufacturing facilities here rather than in China. The Indian push comes as European aerospace and defence manufacturers desperately seek ways and means to counter the negative effect of the depreciation of the dollar and the appreciation of the euro, which is impacting their bottom line negatively.
While American aerospace and defence giant Boeing has already been scouting for partners within Indian shores for long and has struck up relations with local companies, European giants like EADS are yet to strike roots. Sources say that the government may provide these companies a conducive business environment, both regulatory as well as manufacturing, in an attempt to make them shift their manufacturing bases to India.
EADS, for instance, sources aircraft components worth about $25 billion annually from around the world.
According to sources, the government may soon convene a high-level meeting in this regard, which would, amongst other issues, also consider relaxing the existing foreign direct investment (FDI) cap in defence related sectors from 26 per cent
With demand for civilian and military aircraft within the country growing phenomenally, the government may take aerospace manufacturing as a viable sector seriously. Industry estimates say there would be a requirement in the general aviation sector alone for nearly 500 aircraft over the next 5-10 years.
According to an estimate, India would require 911 aircraft, valued at $86 billion, over the next 20 years.
