There is increasingly a buzz around the possibilities of assembling a civilian passenger aircraft in the country. Although the government has been pushing for jet assembly for several years, prime minister Narendra Modi stated that the country would soon be manufacturing big passenger aircraft proudly bearing the words “Made in India”, at the foundation ceremony of the Tata Airbus C-295 aircraft manufacturing facility in Vadodara in end-October last year. The policy intent in this regard has gathered momentum after the historic Boeing and Airbus fleet acquisition plans of the Tata Group’s flagship carrier Air India. Union civil aviation minister Jyotiraditya Scindia told Reuters that conditions were now ripe for a “leap of faith” by both jet makers to assemble aircraft on domestic soil to cater to the soaring demand. India’s fleet requirements are pegged at 2,000 in the next 15 years. The enabling infrastructure is also in place for the industry to take off. The number of airports has increased from 74 to 147 during the last eight years. The regional connectivity scheme, UDAN, launched seven years ago, is supposed to have ensured air connectivity with smaller towns and remote parts of the country. The prospect of assembling civilian aircraft is perhaps an idea whose time has come.
While the higher level of policy ambition is to be welcomed, the process will take more time to bear fruit. Airbus and Boeing have resisted the policy pressures for civil final assembly lines, citing the critical mass of their investments in engineering, supply chain and maintenance in the country. Airbus’ president of India and South Asia stated that the company’s industrial footprint already generates more forex value and jobs for India than any modern assembly activity would. Boeing sources $1 billion in products and services from the country and has recently announced a plant in Hyderabad to convert its 737 passenger planes into dedicated freighters to cash in on the boom in e-commerce. The president of Boeing India feels the volumes required for final assembly on the commercial part of the business are just far greater. The big question is what is the sort of demand that Airbus and Boeing are looking at to take the final leap of faith? If a final assembly line is justified only when it turns out 5-10 aircraft a month and there is reportedly an overall demand for 120 a year, then the massive fleet expansion plans of not just Air India but also Indigo indicate that the time is right.
Also read: Is 2008 back to haunt 2023? Lessons from SVB, Credit Suisse failures for India
Persuading Airbus and Boeing to set up shop, however, calls for greater strategic intent by taking the C-295 deal as an exemplar. As this project entails purchasing a certain number of aircraft in a flyaway condition and the rest to be assembled in Vadodara, there is a warrant to similarly reconfigure the massive fleet orders by the domestic airlines to ensure that a certain proportion are assembled in India. Otherwise there is no deal. The other option is a process staggered in time to push the jet makers to source more from the country to enable domestic suppliers to gain more expertise and a manufacturing ecosystem is established to assemble civilian aircraft for Boeing and Airbus. The most efficacious course of action is to use this ecosystem to assemble an indigenously designed civilian passenger aircraft that is truly Made in India.
