Global Aerospace Firms Shift to India Amid Western Supply Chain Challenges
Amid a Western supply chain crisis, global aerospace giants like Airbus, Collins Aerospace, Pratt & Whitney, and Rolls-Royce are increasingly sourcing parts from India, catalyzing growth in the nation’s burgeoning aerospace sector. This shift is prompting local companies to enhance their capabilities, industry insiders report.
Bengaluru-based Hical Technologies and JJG Aero are capitalizing on this trend. Hical, which supplies Raytheon Technology and Boeing, plans to double its aerospace division’s revenue to 5 billion rupees ($57.57 million) within three years, according to Yashas Jaiveer Shashikiran, joint managing director. Meanwhile, JJG Aero has seen its revenue jump from $2 million to $20 million in the last six years, shared CEO Anuj Jhunjhunwala.
This growth is part of a broader Asia-Pacific aerospace boom, with 2024 revenue expected to exceed 2019 levels by 54%, while North America and Europe are projected to remain 3% and 4% below their pre-pandemic figures, Accenture Research noted.
“Earlier, we were pursuing customers. Now, they are proactively seeking partnerships with Indian manufacturers,” Jhunjhunwala commented, noting that contract negotiations and onboarding processes have significantly sped up.
Indian companies are manufacturing critical parts for landing gear, wings, fuselages, electrical switches, and motion control systems, which are essential for flight safety and performance.
Western manufacturers, hampered by strikes, production limitations, and shortages of parts and labor since the pandemic, are turning to India to meet the surging demand for air travel. “India is the optimal solution to current supply chain challenges,” stated Huw Morgan, senior vice president for aerospace procurement at Rolls-Royce, during a recent industry event. He added that traditional supply chains are struggling to support increasing engine volumes, which are growing at about 20% annually.
Rolls-Royce plans to double its sourcing from India within the next five years. Despite being one of the world’s largest aircraft purchasers, India currently contributes just 1% to the global supply chain market, a figure that the newly established Aerospace India Association aims to change.
“Post-Covid, the global aerospace industry is at a turning point. While shifts began in 2020, changes in aerospace typically take time to materialize,” explained Aravind Melligeri of supplier Aequs.
More Planes, More Parts
India, the world’s third-largest domestic aviation market by seats, is also one of the fastest-growing, driving an increased demand for maintenance services and parts.
Massive aircraft orders from carriers like IndiGo and Air India are propelling growth throughout the aviation ecosystem, Air India CEO Campbell Wilson told Reuters.
While Indian companies have long been part of the $180 billion global aerospace industry, they are now advancing to more sophisticated tasks such as design, engineering, and system integration. For instance, Airbus recently awarded its second aircraft door contract within a year to Indian suppliers.
“India currently contributes over 1 billion euros to the Airbus supply chain, and we aim to double that,” stated Michel Narchi, head of international operations at Airbus. “Every commercial aircraft from Airbus today includes components made in India.”
Industry Efforts
Last week, India’s civil aviation ministry convened a meeting with industry leaders to discuss enhancing component manufacturing, revealed Srinivasan Dwarakanath, Director General of the Aerospace India Association. A critical focus is on local sourcing of raw materials like aluminum, steel, and titanium, leading to the eventual certification of designs crafted by Indian suppliers.
The Aerospace India Association estimates that within a decade, India will capture 10% of the global supply chain market, with the sector projected to reach $250 billion annually by 2033.
“Initially, the geographic distance from main markets like the U.S. and Europe posed challenges in engineering approvals, qualification timings, and raw material sourcing. It took time to establish the ecosystem, but India is now well-positioned,” Jaiveer of Hical concluded.
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Sources: AirGuide Business airguide.info, bing.com, reuters.com