India is pitching Airbus, Boeing to set up final assembly lines

Airbus and Boeing may have been sounded out by the Indian government about the possibility of setting up final assembly lines (FAL) for their commercial aircraft in India, according to reports in the Indian media.

Underlying this request would be the record number of orders the two major manufacturers are getting from the airlines of India.

Following its acquisition by Tata Sons, Air India is said to be preparing a massive 500-strong order, which would be divided between Airbus and Boeing. If confirmed, this would add to pre-existent, commitments by low-cost carrier Indigo, which in recent years placed orders for up to 730 Airbus A320-family aircraft, and startup airline Akasa Air, which has 72 Boeing aircraft on order as well as smaller orders from other airlines in the country.

Overall, it is estimated that Indian airlines will be inducting some 2,000 aircraft into their fleets over the next decade. These are the sorts of figures capable of making a dent in trade statistics. With imports of aircraft and the related spares growing at double digits, the Indian government is said to be concerned of their impact on the trade deficit.

What’s more, a final assembly line in India would also involve the development of local supply chains, with the corresponding spillover effects to the rest of the economy.

So far, of the major aircraft manufacturers, Airbus has led a more globalized production strategy, with assembly lines in the US (Mobile, Alabama) and China (Tianjin) for its best-selling A320-family, in addition to its original facilities in Europe (in Toulouse, France, and Hamburg, Germany). All of Boeing’s FALs are in the US.

An assembly facility in India would not be a total novelty for Airbus, which already partnered with Tata (one of whose divisions owns Air India) to assemble the C295 military aircraft for the Indian Air Force in Vadodara, Gujarat.