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Aerospace Resource Guide: India

 

India Statistics

Summary
Market Entry

Current Market Trends

Current Demand

Main Competitors
Barriers

Trade Events/Associations

CS Contact

Capital: New Delhi
Population:
1.2 billion
GDP
: USD 1.779 trillion
Currency:
INR
Language
: Hindi, English & Regional languages

Summary

The India aviation industry is currently the 9th largest, handling 121 million domestic and 41 million international passengers. India has 5 domestic airlines - Air India is the national carrier owned by Government of India and the rest (Indigo, Jet Airways, Spice Jet and Costa) are owned by the private sector. More than 85 international airlines (either individually or through code-share) fly to and from India to over 40 destinations.

File:IndiGo Logo.jpg

File:SpiceJet logo.svg


All major cities in India are linked with efficient air connectivity, but it is still a challenge to fly to smaller cities and towns. The local or regional aviation infrastructure lacks funding, modern airport infrastructure and skilled workforce availability.

The Indian Government has introduced several policies and regulatory reforms for the development of the aviation industry by inviting private sector participation and investments. About 236 million domestic passengers and 85 million international passengers will be handled by India airports by 2020, making the country the third largest aviation market in the world.

Indian Aviation Industry accounts for only 1.5 per cent of the GDP but it plays a significant role in the overall economic development of the country. The industry has undergone a new wave of expansion driven by low-cost carriers, modern airports, foreign direct investments in domestic airlines and regional connectivity. This report will provide you with a brief synopsis on the India Aviation market, information on business opportunities and challenges for the U.S. aviation industry.

The Ministry of Civil Aviation (MoCA)
is responsible for formulation of national policies and programs for the development and regulation of the Civil Aviation sector in India.

MoCA exercises administrative control over various autonomous organizations such as the Directorate General of Civil Aviation (DGCA), Bureau of Civil Aviation Security (BoCAS), Indira Gandhi Rashtriya Udan Academy (IGRUA), National Aviation Company of India Limited (NACIL), Pawan Hans Helicopters Limited and Airports Authority of India (AAI).

The Ministry of Civil Aviation has approved an outlay of USD 1.6 billion for FY14 for the development of airport infrastructure, and allows up to 49% Foreign Direct Investment (FDI) in the India’s commercial aircraft operations.

Market Entry


Opportunities for American aviation companies in the Indian Aviation industry are abundant, and can be segmented in the following areas:

As an Engineering, Procurement and Construction (EPC) company for Airports.
As an MRO (Maintenance Repair and Overhaul) operator.
As a Training Institute/University to train personnel in ground handling, inflight crew, engineering services, etc.
As a lessor for commercial and general aviation aircraft.
As an airport operator (Enter into a Joint Venture with private firms (GVK, GMS, Reliance etc.), AAI & a state government to operate, maintain and develop the airport.
As a General Aviation operator to provide regional connectivity for passenger movement and also to address medical emergencies and promote tourism.
As a supplier of construction and installations tools, passenger and cargo handling, rescue and emergency systems, airfield equipment and services, disaster management and system integration.

Current Market Trends


The Indian civil aviation industry is among the top 10 in the world with a size of approximately USD16 billion. Indian currently has 400 commercial aircraft, which are projected to increase by 1000 in 4-5 years.

India’s general aviation fleet size is currently at 690 and is expected to reach 2000 by 2020.

The air freight/cargo sector in India has been growing at a compounded annual growth rate of 11.36% from 2006-2011, and it is expected to maintain a further growth rate of 10% yearly by 2014. During the last five years, the cargo handled at Indian airports recorded Compounded Annual Growth Rate (CAGR) of 10.9% with international cargo accounting for two-thirds of the total cargo handled mainly at Mumbai, Delhi, Hyderabad, Bangalore and Chennai. Cargo handling capacity has been rising from half a million tons (in 2011) to 3.3 million tons in 2013.

Opportunities in the Maintenance, Repair and Overhaul (MRO) exist for servicing of up to 1,000 commercial aircraft and 690 GA aircraft. Both Boeing and Airbus have decided to invest in new MRO facilities. Industry sources estimate that establishing a world class MRO will require an investment of over USD 250 million, and the sector is estimated to grow at 10% annually and reach USD 1.3 billion by 2020.

(In Millions)

2013

2014

2015
(estimated)

Total Market Size

12400

16400

20000

Total Local Production

328

435

540

Total Exports

225

450

675

Total Imports

1000

1200

1600

Imports from the U.S.

7500

8000

12000

Exchange Rate: 1 USD

61.1325 (INR)


Current Demand


Demand for Maintenance, Repair and Overhaul MRO activities is one of the major drivers in the Commercial Aircraft market in India. The MRO market in India is expected to grow at a rapid rate as the market witnesses several growth opportunities, as there are several MRO projects under development in the country.

Aviation training is another focus area, which is attracting interest from global institutes to partner with local Indian institutes / universities in offering their programs and setting up of aircraft simulators.

Competitors


Aviation manufacturers such as Embraer, Airbus and Bombardier have presences in India and are strong competitors to U.S. manufacturers offering commercial aircraft to the local India carriers.
The market also has presence of Canadian and European firms offering Aviation related services and equipment for airport infrastructure and development.


Barriers

In February 2014, The FAA (Federal Aviation Administration) downgraded India Aviation to Category 2 rating for safety deficiencies identified by the ICAO. A Category 2 rating indicates that a country lacks laws or regulations necessary to oversee air carriers in accordance with international standards and has resulted in restrictions for Indian carriers (Air India, Jet Airways) to increase flights (Newark), partner with U.S. airlines or use planes other than those they are already flying.
Lack of transparency and long delays for getting approvals for land acquisition or environmental clearances for airport infrastructure.
Lack of skilled workforce.
Lack of regional connectivity.
Success on government tenders is based on L1 criteria (the lowest bidder).
Scarcity of MRO (Maintenance Repair and Overhaul) facilities.
High import duty on import of business aircraft and spare parts for maintenance.
High duty / taxes on ATF (Aviation Turbine Fuel) and such taxes vary by states.
Underdeveloped Air Traffic Management and Air Navigation System.

Trade Events/Associations

India Aviation 2016

Hyderabad
http://www.india-aviation.in/



U.S. Commercial Service Contact Information:


Mr. Jitender Jassal
Senior Commercial Specialist
Jitender.Jassal@trade.gov
+91 11 2347 2187


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