SOURCE: AFI
Airbus is reportedly considering a proposal from the Indian Civil Aviation Ministry to establish a Final Assembly Line (FAL) in the country, driven by surging demand from Indian airlines and competitive pressure from other aerospace giants. As India’s aviation sector continues to grow at an unprecedented pace, with carriers like Air India and IndiGo placing orders for over 1,200 aircraft, the European manufacturer sees an opportunity to deepen its footprint.
This move comes amid counteroffers from Brazilian aerospace firm Embraer, which has expressed interest in setting up a local FAL to produce its Embraer E175 regional transport aircraft, intensifying the race for dominance in India’s burgeoning market.
Over the next two decades, India is poised to remain one of the fastest-growing aviation markets globally, presenting both opportunities and challenges for Airbus and Boeing. The influx of orders, however, raises concerns about potential overcapacity or market saturation, which could lead to a downturn for both companies if demand projections falter. Embraer’s proposal to localize the E175 production taps into the growing need for regional connectivity, particularly for Tier-II cities, where smaller aircraft are essential. This aligns with the Indian Aviation Ministry’s push to boost indigenous capabilities, further complicating the competitive landscape.
Adding to the dynamic, the ministry is also considering reviving the long-pending RTA-90 program led by the National Aerospace Laboratories (NAL). This initiative aims to develop a domestically designed regional aircraft tailored for Tier-II cities, leveraging local aerospace suppliers. The RTA-90, if granted approval, could challenge foreign manufacturers by fostering self-reliance under the “Make in India” banner, potentially reducing reliance on imported jets like the Embraer E175 or Airbus’s offerings.
While Airbus’s potential FAL—potentially building on its existing C295 partnership with Tata Advanced Systems—could solidify its position, the company must navigate Embraer’s aggressive entry and NAL’s ambitions. The decision hinges on balancing short-term production demands with long-term market stability, as India’s aviation boom could either propel or strain global aerospace giants. As negotiations unfold, the outcome will shape the future of aircraft manufacturing in India and its role in the global supply chain.
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