Boeing and Airbus to Outsource USD 3 Bn in Aerospace Works to India

Strategic Insights -

US-based Boeing Co and European plane maker Airbus Industries are on the verge of finalising a deal to supply 111 aircraft to Air India and Indian Airlines, with the Indian government making it mandatory for the aircraft manufacturers to outsource at least 30% of the total value of the deal to Indian companies. This move is expected to generate significant aerospace exports for India, with estimates suggesting that Indian companies could receive a USD 3.1 billion offset order for the purchase of 111 aircraft. The development is expected to boost India's current aviation exports, which stand at Rs 300 crore, to over Rs 12,000 crores in the next five years.

Key Takeaways:

  • Boeing and Airbus plan to outsource USD 3 billion in aerospace works to India, with the Indian government mandating a minimum 30% offset clause for aircraft manufacturers.
  • The deal is expected to generate a USD 3.1 billion offset order for Indian companies for the purchase of 111 aircraft.
  • Indian Airlines plans to purchase 43 Airbus aircraft, including A-319, A-320, and A-321 models.
  • Air India plans to acquire 68 Boeing aircraft, including 34 Boeing 777-200, 15 Boeing 777-300, 27 Boeing 787s, and 18 Boeing 737-800s.
  • India's current aviation exports stand at Rs 300 crore, but are expected to cross over Rs 12,000 crores in the next five years.
  • The deal is subject to formalities and discussions between the Civil Aviation Ministry and Boeing.

Statistics:

  • USD 3 billion: Value of aerospace works to be outsourced to India by Boeing and Airbus.
  • USD 3.1 billion: Estimated offset order for Indian companies for the purchase of 111 aircraft.
  • 111 Aircraft: Total number of aircraft to be supplied by Boeing and Airbus to Air India and Indian Airlines.
  • 43: Number of Airbus aircraft to be purchased by Indian Airlines.
  • 68: Number of Boeing aircraft to be purchased by Air India.
  • 30%: Mandatory offset clause for aircraft manufacturers.
  • Rs 300 crore: Current aviation exports from India.
  • Rs 12,000 crores: Estimated aviation exports from India in the next five years.

Sources:

  • PTI, "Boeing, Airbus to outsource USD 3 bn aerospace works to India", Mumbai, Dec 4.