Indian aerospace market worth US$24 billion by 2016 – study


India’s aerospace industry is expected to grow by 15% a year over the next five years, reaching a value of around US$24 billion by 2016, a new study predicts.

Lucintel notes that India’s aerospace industry has experienced significant growth over the last five years and this is expected to continue, with a compound annual growth rate (CAGR) of 15% over the next five years.

All segments of the Indian aerospace industry grew substantially, with the original equipment manufacturer (OEM) market registering maximum growth of approximately 20% CAGR over the last five years, Lucintel notes in its report, “Indian Aerospace Supply Chain Analysis 2011.”

High domestic demand of aircraft and the introduction of the defence offset policy in 2006 have provided immense opportunities for companies entering this sector. Lucintel’s research indicates that over the next five years, the Indian offset market is expected to witness double-digit growth and reach new highs over the next 10 years primarily driven by India’s procurement plans.

The Indian aerospace supply chain is sustaining strong growth through joint ventures (JVs) and partnerships with foreign aerospace players. Low labour costs, coupled with IT competitiveness, is creating JV and partnership opportunities for Indian aerospace supply chain players with global aerospace majors such as Boeing and Airbus for various systems and subsystems manufacturing.

India’s Maintenance, Repair and Overhaul (MRO) sector is witnessing increasing interest from foreign and domestic players. The Indian MRO market is expected to reach $1.8 billion by 2016. Boeing has recently set up its MRO unit in India. Various other companies such as Airbus and Dassault are planning to set up MRO units in India.

However there are some challenges in front of Indian MRO players which should be addressed quickly, including infrastructure development and technological advancements.

The commercial aircraft market is expected to demonstrate strong, positive growth. The demand for business jets will grow with economy, which is poised for robust growth; consequently the business jets market will grow significantly.

Lucintel earlier predicted that India’s domestic passenger growth is expected to reach a level of 150-180 million passengers by the year 2020.