Indian Aircraft Component Manufacturing and Services Industry to Generate $40.00 billion from Defense Offsets

Growing domestic demand for civil as well as military aircraft coupled with the defense offsets is fuelling the growth of the Indian aircraft manufacturing and services industry. Beating back spirited competition from Latin America, India remains an attractive low-cost manufacturing destination with a huge engineering talent pool and proven IT capabilities. However, the domestic industry has stay on its toes to remain the manufacturing hub of choice.

New analysis from Frost & Sullivan, Strategic Analysis of Indian Aircraft Component Manufacturing and Services Industry, finds that the industry earned revenues of $2.09 billion in 2010 and estimates this to grow at a compound annual growth rate of more than 16 percent to reach $4.56 billion in 2015.

The Indian industry's lack of MRO companies with globally recognized certifications and inadequate expertise in providing end-to-end solutions could narrow the gap between the Indian industry and some of the low labor-cost Latin American countries, primarily Mexico and Chile.

The Government's inclusion of civil aerospace products in the offset eligibility list will widen the spectrum of outsourced work and extend the benefits to a larger section of domestic industry participants. Government spending on foreign procurement as a part of armed forces modernization also creates huge offset opportunities.