(MENAFN- Live Mint)

New Delhi: Top global aerospace firms are urging India to bring a production-linked incentive (PLI) scheme for aerospace components, cautioning that the country could miss out on major manufacturing shifts unless it delivers a long-pending policy trigger. With Morocco, Turkey and Japan rolling out aggressive incentives, industry executives say India risks losing momentum in the industry unless it moves quickly.

Cutting across original equipment manufacturers (OEMs) including engine-makers such as RTX's Pratt & Whitney, airframe leaders like Airbus and Boeing, as well as several domestic players, the companies are seeking a scheme for aerospace component manufacturing on the lines of the PLI for drones that had expired in FY24.

The scheme, say executives, could lead to foreign OEMs expanding sourcing, investing deeper and shifting more high-value production to India. The biggest hope is that some of these players would set up their final line assembly in the country.

“The government's PLI scheme for drones fast-tracked local capability," Ashish Saraf, vice president & country head, India at Pratt & Whitney, told Mint.“A similar sector-specific PLI for aerospace and defence could have a transformative impact, especially given the sector's capital-intensive nature and complex supply chains."

Though drones are way less capital-intensive than aerospace, for perspective, India's drone PLI offered ₹120 crore in incentives over three years (FY22-FY24), rewarding companies based on the value they add in India. Around ₹98 crore was disbursed under this plan. Value-addition is calculated as sales minus input costs, and firms get 20% of this amount as incentive.

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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, as per a June 2024 report by Grand View Research, a consultancy firm. As per the Engineering Export Promotion Council of India, India's aircraft and spacecraft parts and products exports were at $6.9 billion in FY25.

India has quite a few aerospace component manufacturing units that include Hindustan Aeronautics, Tata Advanced Systems, Aequs and Mahindra Aerospace.

According to publicly-available information, the civil aviation ministry does not have any plans yet for a PLI for the sector. There was no response to Mint's emailed queries to the ministry till press time.

Saraf said, foreign OEMs have already committed“large-scale investments over the past two decades" into India and investment by companies like RTX have brought“global competitiveness" to India supply chains.

French aerospace major Safran is setting up its first engine maintenance, repair and overhaul (MRO) facility in the country. Located in Hyderabad, the LEAP engine MRO, is built at an investment of $150 million. At present, airlines in India have placed orders for about 1,500 Safran engines to power their aircraft. The facility is expected to significantly reduce turnaround times for Indian carriers, boosting fleet availability and operational efficiency.

Salil Gupte, president of Boeing India & South Asia, argues that a PLI focused on aerostructures, cabin interiors, and landing-gear parts could reposition India from a niche engineering player to a global manufacturing hub.

“A PLI can unlock India's manufacturing potential and strengthen the aerospace supplier ecosystem," he told Mint. The executive said that a major bottleneck remains access to aerospace-grade titanium and aluminum, materials many Indian suppliers still import.

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Input import dependence

One of the major sticking points for India's aerospace suppliers is its import dependence. Raw materials such as titanium sponge and aerospace-grade aluminum are imported at scale, limiting the cost competitiveness.

For instance, while India has a titanium sponge plant (in Kerala), its capacity is limited. Recognizing this gap, recent efforts include a world-scale titanium alloy remelting facility in Lucknow, but it has only recently come onstream.

Owing to this gap, the industry is pushing for a 10-year-long 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 India based component manufacturer requesting anonymity.

Support for in-country MRO and localization milestones tied to payout are being sought too, said a second player.

Aircraft maker Airbus, which sources components roughly $1.5 billion ( ₹15,000 crore) a year from India, is pushing for a PLI that could scale its sourcing to $2 billion well before 2030.“India needs a lot of investment to get things going," said Jürgen Westermeier, president & managing director of Airbus India & South Asia. He noted that aerospace manufacturing requires significant long-term capital investment.

“You (India) have this production-linked incentive for other sectors. Why not extend it to aerospace? 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 being re-engineered and manufactured locally. Components such as doors, a complex and integral structure in an aircraft, are being sourced from India, making it one of the key hubs.

Airbus is yet to respond to queries from Mint.

Aerospace qualification cycles are very long and cumbersome, passing through several layers of testing. Even a simple part, such as a bracket or a panel, can take years of testing, certification, and fine-tuning before it's cleared.

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Global competition

Boeing's Gupte drew comparisons with Morocco, Turkey, and Japan-nations that have built export-driven aerospace clusters by combining government subsidies, skilling programmes, and export support.“India has the talent. What it lacks now is an anchor incentive framework," he said.

Morocco is a fierce competitor in aerospace. In the sector, it now hosts roughly 150 firms spanning fuselages, wiring, structural components, and even engine assembly. In 2024, its aerospace component exports were at $2.9 billion, as per the country's official data.

Japan is also doubling down on aerospace. Ken Research in an August 2025 report said its aerospace and defence market is valued at about $55 billion. This growth is primarily driven by hiked defence budgets amid persistent regional tensions and rapid advancements in aerospace and defence technologies.

Turkey offers major incentives for aerospace high-tech investments. Large projects over 2 billion Turkish lira get tax breaks, VAT refunds, land, and skilled-labour support. R&D and design centres enjoy big tax deductions, tax breaks, and lower social-security costs.

The world's top countries in aerospace component manufacturing include the US, France, Germany, China and the UK.

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