NEW DELHI: Keen for a bigger pie of the world’s fastest growing aviation market, the biggest sectoral original equipment manufacturers’ legal teams are poring over the fine print of the landmark Indo-US trade deal.A zero-duty access to components exported from India to the US will give India parity with other aerospace supply chains such as Europe, Japan and Korea.
While clarity is expected in a week or so, zero duty will mean an “exponential” increase in aerospace exports from India, which is currently pegged at $1.5 billion annually for Airbus and $1.25 billion for Boeing. Officials said Boeing has indicated it will double the sourcing of components from India, with commerce and industry minister Piyush Goyal asserting that India will be one of the largest foreign component suppliers in the coming years.A tariff cut from 50% to 18% also will mean significant relief for the growing aerospace supply chain. It could also translate into large orders for American giants such as Boeing, which already has orders worth $50 billion for hundreds of wide-body and narrow-body planes from Air India Group and Akasa.Sources said that IndiGo is expected to place a mega order for wide-body aircraft which Boeing is eyeing closely. Boeing alone expects orders worth “tens of billions” from India in a not-so-distant future.Boeing India and South Asia president Salil Gupte told TOI: “The US-India trade agreement opens up multifold opportunities, and we are excited by its potential to accelerate bilateral trade and economic relations between the two countries.”Govt officials said Indian carriers led by AI and IndiGo are likely to place orders for $70-80 billion worth of aircraft, engines and spares. Since these are all private companies with no offset requirement for OEMs, Modi govt’s ‘Make in India‘ policy has led the latter to increase their sourcing from India.India expects Boeing to at least double its sourcing from India on the back of the new orders that could be placed now.
