With global aerospace worth $ 100 billion, the potential for the Indian aerospace industry is only expanding year on year. The numbers speak for themselves. The ninth largest civil aviation market in the world has witnessed 40 percent growth in passenger traffic in the past two years and the demand for commercial aircraft exists & is ever increasing. The industry is defined by its enthusiasm and demand for very high levels of technology, dragging project life cycles and high costs. Hence, India was following the ‘perfectionist import substitution’ route, where the country met its demand with partnerships with imported original equipment manufacturers (OEMs) for licensed-production of aircraft. The Make in India initiative launched by Prime Minister Narendra Modi, in September 2014 as part of a wider set of nation-building initiatives, has paved way for airframe manufacturers to increasingly use aerospace suppliers in the country. This path-breaking movement has given India great advantages on the global aerospace industry scenario. The intention is to accelerate the investments in acquisitions and infrastructure, creating a voice among the worldwide aerospace players. However for now, the momentum seems a little slow but steady. In October 2015, the Department Industrial Policy and Promotion (DIPP) proposed to raise the FDI cap to 74 per cent allowing to manufacture defence products by private players. This initiative aims for a certain percentage of the aircraft to be produced in India. This has encouraged a lot of Indian companies to enter into joint ventures with foreign companies to launch defence subsidiaries in the country, giving them a significant role in the industry. Although the overall industry momentum is constrained, the efforts put in the defence products manufacturing is on a steady growth path, with the new government policy. India has the highest domestic air traffic among all countries, with a significant increase of 23 per cent in January 2015, according to the International Air Transport Association’s (IATA) monthly air traffic report. By 2034, IATA projects India will account for 367 million air travellers. This increases the demand in the industry, thus benefiting the aerospace manufacturers in India. India primarily has to concentrate on the improvisation of the Air Traffic Management (ATM), a ground level infrastructure modernisation, for a clutter-free growth in the industry. With the support of government policy and initiatives, the manufacturing sector has boomed, with many Indian companies becoming transnational. The sector has seen the adoption of best practices and maintains international standards in quality. India must also address the need to go beyond being merely a ‘soft power’ in this space, by developing more facilities that provide an end-to-end aerospace solution. This can only happen when there is cross pollination of knowledge and technologies from more advanced nations. Currently, India’s share of the global aerospace industry is only $ 250 million, but according to a joint report by IESA, Nasscom and Roland Berger, the total market opportunity for aerospace and defence (A&D) market in India will reach $70 billion by 2029. India is the seventh largest A&D market globally but with the current scenario, one can expect a lot more from the country. The demand for aerospace manufacturers is so high that competition is more than welcome. An aircraft may easily have more than 3 million parts and it is impossible to expect one or few companies to take on the challenge. The Indian aerospace industry is closer to catapulting itself into the global arena, with the support from the government’s new policies, setting the industry on to a firm path to transformational change. With a steady growth in this path, there are positive signs for the Indian aerospace industry to emerge as a major factor in the country’s increasing self-reliance.
Source: http://www.business-standard.com/
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