Boeing Pivots on India Assembly Plans, Citing Market Demand
Boeing has indicated that it requires additional orders from India to consider establishing a final civil aircraft assembly line in the country. This news may dampen the government's aspirations to have commercial jets assembled by the U.S. planemaker within India.
"The business case for final assembly in any region must be significantly larger than the current Indian market," stated Salil Gupte, Boeing India and South Asia president. "It necessitates a substantial increase in aircraft purchases beyond current levels."
Despite Prime Minister Modi's previous announcement that India would soon see domestically designed and manufactured Boeing aircraft, Gupte emphasized a gradual approach. He highlighted the need to develop step-by-step capabilities towards that goal.
Boeing previously projected a 2,835-aircraft expansion in Indian and South Asian airline fleets over the next 20 years. However, Gupte clarified that final assembly comprises less than 10% of an aircraft's value, with the majority derived from other manufacturing processes.
The company currently sources $1.25 billion worth of products and services annually from over 300 Indian suppliers, employing approximately 7,000 individuals. Boeing's joint venture with Tata Group produces helicopter fuselages and aircraft components for global clientele.
Addressing supply chain challenges, Gupte urged the government to provide incentives to suppliers, reducing the cost of capital in India and bolstering the aerospace supply chain. He expressed optimism that dialogue with the civil aviation ministry would facilitate progress in this area.