Original Equipment Manufacturer (OEM) companies, including engine manufacturers such as RTX’s Pratt & Whitney, leading airframe manufacturers such as Airbus and Boeing, and several domestic players, are looking at the scheme to manufacture aero components on PLI lines for drones that expired in FY24.
The scheme, executives say, could see foreign OEMs expand resources, invest more deeply and shift more high-value manufacturing to India. The biggest hope is that some of these players will establish their final assembly line in the country.
“The government’s drone PLI scheme has enabled fast-tracking of local capabilities,” Ashish Saraf, vice president and country head, India at Pratt & Whitney, told Mint. “A similar sector-specific PLI for aerospace and defense could have a transformative impact, especially given the capital-intensive nature of the sector and complex supply chains.”
Although drones are much less capital intensive than aviation, for perspective, India’s drone offers PLI ₹120 crore in incentives over three years (FY22-FY24), rewarding companies based on the value they add in India. Around ₹As part of this plan, 98 million crowns were paid out. Value added is calculated as sales minus input costs, and firms receive 20% of this amount as an incentive.
India’s aerospace parts manufacturing market size is seen at $21.48 billion by 2030 with a CAGR of 6.8% from 2024 to 2030, according to a June 2024 report by consultancy Grand View Research. According to the Engineering Export Promotion Council of India, India’s exports of aircraft and spacecraft parts and products stood at $6.9 billion in FY25.
India has several manufacturing units for aerospace components, which include Hindustan Aeronautics, Tata Advanced Systems, Aequs and Mahindra Aerospace.
According to publicly available information, the Ministry of Civil Aviation does not yet plan a PLI for this sector. Email queries sent to the Mint had not been answered by press time.
Saraf said foreign OEMs had already made “large-scale investments” in India over the past two decades, and investments by companies like RTX had brought “global competitiveness” to Indian supply chains.
French company Safran is setting up its first engine maintenance, repair and overhaul (MRO) facility in the country. The LEAP engine MRO, located in Hyderabad, is built with an investment of $150 million. Currently, airlines in India have ordered about 1,500 Safran engines to power their aircraft. The facility is expected to significantly reduce turnaround time for Indian carriers, increase fleet availability and operational efficiency.
Salil Gupte, president of Boeing India & South Asia, says PLI focused on aerostructures, cabin interiors and landing gear parts could reposition India from a niche engineering player to a global manufacturing hub.
“PLI can unlock India’s manufacturing potential and strengthen the aerospace supplier ecosystem,” Mint said. The chief executive said access to aerospace titanium and aluminum, materials that many Indian suppliers still import, remains a major hurdle.
Input import dependency
One of the main problems facing Indian aerospace suppliers is their dependence on imports. Raw materials such as titanium sponge and aerospace aluminum are imported in bulk, limiting cost competitiveness.
For example, while India has a titanium sponge plant (in Kerala), its capacity is limited. Given this gap, recent efforts include a world-class titanium alloy remelting facility in Lucknow, but this has only recently emerged.
Given this gap, the industry is pushing for a 10-year incentive horizon, not just 3-5 years. “Full value chain coverage, not a narrow list of components; and eligibility for foreign OEMs, JVs, wholly owned subsidiaries,” said an Indian component maker, requesting anonymity.
Support for in-country MROs and localization milestones linked to pay are also being sought, the second player said.
Aircraft manufacturer Airbus, which supplies about $1.5 billion worth of parts ( ₹15,000 crore) annually from India, PLI is pushing, which could expand its resources to $2 billion even before 2030. “India needs a lot of investment to make things work,” said Jürgen Westermeier, president and managing director, Airbus India & South Asia. He noted that aircraft manufacturing requires significant long-term capital investment.
“You (India) have this incentive linked to manufacturing for other sectors. Why not extend it to the aerospace industry? This is a growing industry,” he said during an aviation event in Delhi in October.
Airbus engineering teams in India are expanding by 20% annually, sourcing complex parts that are now redesigned and manufactured locally. Components such as doors, complex and integral aircraft structures are sourced from India, making it one of the key hubs.
Airbus is yet to respond to Mint’s queries.
Aviation qualification cycles are very long and cumbersome and go through several layers of testing. Even a simple component like a bracket or panel can take years of testing, certification, and fine-tuning before it’s approved.
Global competition
Boeing Gupte drew comparisons with Morocco, Turkey and Japan – countries that have built export-based aerospace clusters through a combination of government subsidies, qualification programs and export support. “India has talent. What it lacks now is an anchoring incentive framework,” he said.
Morocco is a fierce competitor in aviation. The sector is now home to around 150 firms covering hulls, wiring, structural components and even engine assembly. In 2024, its aerospace component exports were $2.9 billion, according to the country’s official data.
Japan is also doubling its aviation volume. In an August 2025 report, Ken Research said its aerospace and defense market is worth about $55 billion. This growth is primarily driven by increased defense budgets amid ongoing regional tensions and rapid advances in aerospace and defense technology.
Turkey offers significant incentives for investment in high-tech aviation. Large projects over 2 billion Turkish lira receive tax credits, VAT refunds, land and skilled labor support. Research and development centers and design centers have large tax deductions, tax credits and lower social security costs.
The world’s leading countries in the production of aircraft components include the USA, France, Germany, China and the United Kingdom.
