Market Intelligence
Aerospace and Defense India Trade Promotion

India Aerospace and Defense

The Maintenance, Repair, and Overhaul (MRO) segment of India’s aerospace industry is on the threshold of significant changes.  The MRO market is growing at approximately 8 percent annually, significantly higher than the global average of four percent. According to one survey in 2019-2020, Indian carriers imported $1.31 billion of MRO services. Today, India has only a one percent share of the global MRO market, and 90 percent of Indian carriers’ MRO expenditures are spent outside India.

Opportunities for U.S. companies:

Though it constitutes a smaller portion of the overall MRO business in India, the range of potential opportunities for U.S exporters can include engines spares ,parts and components; workshop tools; test equipment; inspection equipment; auxiliary power units (APU); and maintenance training services etc.  Major Indian MRO players, including Air India (Nagpur), GMR (Hyderabad), and Air Works India (Hosur), are taking steps to partner with global companies as they move towards upgrading their maintenance capabilities.

Government Policies & Reforms:

Creating a major boost for the sector, earlier this year the Indian government announced its decision to finalize reduction of the GST tax rate from 18 percent to 5 percent for the MRO industry, effective April 1, 2020. The policy reform also provided the benefit of full tax credit on inputs. In line with the Indian government’s “Make in India” policy, 100 percent foreign direct investment is now allowed to encourage International participation.

The Indian Defense MRO Segment:

In the defense MRO segment, maintenance and repair services are mainly confined within the defense services, largely covered within the warranty clauses of OEM suppliers. MRO services are supported by Hindustan Aeronautics Limited (HAL), which is a defense public sector unit. HAL does procurement through a tendering process and preference is given to registered vendors.

Keys to Success:

In order to successfully enter the Indian market, U.S. companies should consider the following key factors:

  • The Indian market is diverse and complex. Companies need to carefully research and analyze the market, including relevant regulations and policies and the competitive landscape; 
  • Success in India hinges on finding the right partners. Take time to carefully consider and select partners that have knowledge of the local market, the regulatory landscape, and business procedures. 
  • Maintaining consistent follow-up and supply.
  • Perhaps more importantly, ensure that your market entry strategy allows for patience. Also, remain committed to the market, and never lose sight of milestones and objectives. Diligence, commitment, and regular communication with your partners is critical to success.

Forthcoming Events: 

Aero India 2021
Date:  February 3-7, 2021
Venue:  Yelahanka Airforce Station, Bengaluru, India
Visit the U.S. Partnership Pavilion.
Organized by the Indian Ministry of Defense, Aero India is the country’s premier biennial airshow and aviation exhibition.

Web Resources: Airports Authority of India

For more information, the U.S. Commercial Service’s India Aerospace & Defense team:

Geoffrey Parish, Principal Commercial Officer, North India, Geoffrey.Parish@trade.gov
Nisha Wadhawan, Sr. Commercial Specialist, Aerospace and Defense Team Lead Nisha.Wadhawan@trade.gov
Arindam Sarkar, Commercial Specialist, Aerospace and Defense Team Member; Arindam.Sarkar@trade.gov

 

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