Key Takeaways
• Global OEMs source over USD 2 billion annually in aerospace components from India as of May 2025.
• India’s aerospace exports projected to grow at 2.9% CAGR, reaching USD 2.4128 billion by 2028.
• New laws and tax reforms reduce costs, boosting India’s aerospace manufacturing and export capabilities.
India’s Aerospace Component Exports: Data Analysis of Growth, Policy, and Global Impact
Purpose and Scope
This analysis examines the current status, growth trajectory, and policy environment of India’s aerospace component exports, with a focus on the role of global Original Equipment Manufacturers (OEMs), recent legislative reforms, infrastructure investments, and future market projections. The scope covers export data, government initiatives, and industry trends from 2023 to 2028, providing a comprehensive overview for stakeholders including exporters, policymakers, investors, and international partners.
Data Sources and Periods Covered
The data in this analysis is drawn from:
– Official statements by Civil Aviation Secretary Samir Kumar Sinha (May 2025)
– Government of India export statistics for fiscal years 2023-24 and 2024-25
– Ministry of Defence export authorisation records (2023-2025)
– Market projections from industry associations and research agencies (2024-2033)
– Recent legislative documents, including the Protection of Interests in Aircraft Objects Act 2025 and Bharatiya Vayuyan Vidheyak, 2024
– Infrastructure investment announcements and sectoral reports
The primary period of analysis is 2023-2028, with forward-looking projections up to 2033 for market size and export potential.
Key Findings
- Global OEMs now source over USD 2 billion in aerospace components and services annually from India, as confirmed by Civil Aviation Secretary Samir Kumar Sinha in May 2025.
– India’s aircraft parts exports are projected to reach USD 2.207 billion in 2025, with a steady compound annual growth rate (CAGR) of approximately 2.9% through 2028. - Engineering goods, including aerospace components, accounted for 26.67% of India’s total merchandise exports in 2024-25.
- Defense exports, which include aerospace components, hit a record USD 2.76 billion in 2024-25, up 12.04% year-on-year.
- Major policy reforms—including new legislation, tax reductions, and infrastructure investments—are supporting the sector’s expansion.
- The domestic aircraft components market is expected to grow from USD 16.22 billion in 2024 to USD 29.50 billion by 2033 (CAGR 6.37%).
- India aims to become the third-largest aviation market globally by 2030, creating significant opportunities for aerospace manufacturing and exports.
India’s Aerospace Export Landscape: Current Status
Export Volumes and Growth
According to Civil Aviation Secretary Samir Kumar Sinha, global OEMs—including leading aerospace companies from the United States 🇺🇸, Europe, and Asia—now source more than USD 2 billion in aerospace components and services from India each year. This figure reflects India’s growing integration into the global aerospace supply chain and its emergence as a reliable manufacturing partner.
Export Projections (2024-2028):
– 2024: USD 2.1356 billion
– 2025: USD 2.207 billion (3.34% growth)
– 2026: USD 2.277 billion (3.17% growth)
– 2027: USD 2.3456 billion (3.01% growth)
– 2028: USD 2.4128 billion (2.87% growth)
The CAGR of 2.9% for aircraft parts exports demonstrates a pattern of steady, sustainable growth. This trend is supported by increasing demand from global OEMs, ongoing policy support, and India’s competitive advantages in engineering and manufacturing.
Sectoral Contribution to Exports
India’s total merchandise exports for 2024-25 reached USD 437.42 billion. Engineering goods, which include aerospace components, made up 26.67% of this total. The electronic goods sector, closely linked to aerospace due to shared technologies and supply chains, posted the highest export growth rate at 32.46%, rising from USD 29.12 billion in 2023-24 to USD 38.58 billion in 2024-25.
Policy Initiatives and Government Support
Make in India and Atmanirbhar Bharat
The Make in India initiative, launched in 2014, aims to transform India into a global manufacturing hub. The government’s stated goal is to raise the manufacturing sector’s share of GDP from 16% to 25% by 2025. Aerospace and defense manufacturing are key focus areas, with incentives for both domestic and foreign investors.
Atmanirbhar Bharat (Self-Reliant India), introduced in 2020, complements Make in India by promoting indigenous production and reducing reliance on imports. This policy shift has led to increased investment in local aerospace manufacturing, R&D, and skill development.
Defense Export Growth and Authorisations
India’s defense exports, which include a significant share of aerospace components, reached a record Rs 23,622 crore (USD 2.76 billion) in 2024-25. This represents a 12.04% increase over the previous year. The Department of Defence Production issued 1,762 export authorisations in 2024-25, up 16.92% from 1,507 in 2023-24. This growth reflects both rising global demand and the government’s commitment to expanding defense and aerospace exports.
Ministry of Defence Targets
The Ministry of Defence has set a target of achieving USD 26 billion in aerospace and defense manufacturing turnover by 2025. This ambitious goal underscores the sector’s importance to India’s economic and strategic objectives.
Legislative and Regulatory Reforms
Protection of Interests in Aircraft Objects Act 2025
This new law aims to improve the Ease of Doing Business in India’s aviation sector. It is designed to help Indian airlines access better leasing and financing options by boosting the country’s Cape Town Convention (CTC) score. A higher CTC score allows airlines to secure more affordable credit and could reduce leasing costs by 8-10%.
The government is developing detailed rules under the Act, with a six-month timeline for stakeholder feedback and finalization. This process is expected to make India a more attractive destination for aircraft leasing and financing.
Bharatiya Vayuyan Vidheyak, 2024 (BVV)
The BVV, which replaces the outdated Aircraft Act of 1934, broadens the regulatory framework to cover aircraft design, manufacturing, and maintenance. It removes inconsistencies from previous legislation and sets the stage for further reforms in the aviation sector.
Tax Reforms
A uniform 5% Integrated Goods and Services Tax (IGST) now applies to imports of aircraft parts, components, and tooling, down from the previous 18% rate. This significant reduction provides a major boost to the Maintenance, Repair, and Overhaul (MRO) sector, making India more competitive as a regional MRO hub.
Infrastructure Development and Industry Growth
Airport Expansion
India’s Civil Aviation Ministry has set a target of 200 operational airports by 2025. To achieve this, the government has committed over Rs. 92,000 crore to greenfield (new) and brownfield (expansion) airport projects. This investment is expected to improve logistics, support export growth, and create new jobs across the aviation value chain.
MRO Sector Growth
India is rapidly emerging as a destination for MRO activities. According to Civil Aviation Secretary Samir Kumar Sinha, expanding the MRO sector will help lower costs for airlines, generate employment, and enhance service capabilities. The reduced IGST rate and supportive policies are expected to attract both domestic and international MRO providers.
Special Economic Zones and Aerospace Parks
States such as Karnataka, Telangana, and Tamil Nadu have established Special Economic Zones (SEZs) and aerospace parks to foster industry growth. These zones offer:
– Modern infrastructure
– R&D support
– Tax incentives
– Access to skilled labor
These facilities have attracted major global OEMs and domestic manufacturers, further integrating India into the global aerospace supply chain.
Market Size and Future Outlook
Market Projections
The India aircraft components market was valued at USD 16.22 billion in 2024. It is projected to grow at a CAGR of 6.37%, reaching USD 29.50 billion by 2033. This growth is driven by rising domestic demand, export opportunities, and ongoing investments in manufacturing and R&D.
Export Ambitions
In February 2025, the newly formed Aerospace India Association announced plans to increase India’s aerospace exports tenfold over the coming years, from the current USD 2 billion baseline. Achieving this goal will require continued policy support, investment in technology, and strong partnerships with global OEMs.
Global Market Position
India’s aviation market is expected to become the third largest in the world by 2030. This expansion will create significant opportunities for aerospace component manufacturing and exports, especially as global airlines and OEMs seek cost-effective, high-quality suppliers.
Technological and Industry Trends
Key trends shaping the future of India’s aerospace exports include:
– Advancements in aerospace technology, such as lightweight materials, additive manufacturing, and digital engineering
– Government policies that favor domestic manufacturing and exports
– Global demand for sustainable, next-generation aircraft parts
– Partnerships with major global aerospace companies, which can drive technology transfer and market access
A notable example is the first finance lease transaction for a widebody aircraft (Airbus A350-900) by Air India, routed through GIFT City-IFSC in 2024. This milestone demonstrates India’s progress toward becoming a global aircraft leasing hub.
Visual Descriptions and Trend Comparisons
If visualized, the data would show a steady upward trend in both export volumes and market size for aerospace components. A line graph plotting annual export values from 2023 to 2028 would reveal consistent year-on-year growth, with a slight tapering in the growth rate as the market matures.
A bar chart comparing India’s aerospace exports with those of other leading countries would highlight India’s rapid ascent, though it still trails established exporters like the United States 🇺🇸 and European Union countries. However, the gap is narrowing as India continues to attract global OEMs and invest in advanced manufacturing.
A pie chart of merchandise exports by sector would show engineering goods as a dominant segment, with aerospace components representing a growing share.
Limitations and Challenges
While the outlook for India’s aerospace component exports is positive, several limitations and challenges remain:
– Global competition: India faces strong competition from established aerospace manufacturing hubs in the United States 🇺🇸, Europe, and East Asia.
– Technology gaps: Bridging the gap in advanced manufacturing technologies and certifications is essential for scaling exports.
– Regulatory complexity: Despite recent reforms, further simplification of export procedures and compliance requirements is needed.
– Infrastructure bottlenecks: Timely completion of airport and SEZ projects is critical to supporting export growth.
– Skill development: Continued investment in workforce training and education is necessary to meet the demands of global OEMs.
Practical Guidance and Next Steps
For Indian exporters and manufacturers:
– Leverage government incentives under Make in India and Atmanirbhar Bharat to expand production capacity and upgrade technology.
– Engage with global OEMs to understand quality standards and certification requirements.
– Utilize SEZs and aerospace parks for access to infrastructure, tax benefits, and R&D support.
– Monitor policy developments, such as the implementation of the Protection of Interests in Aircraft Objects Act 2025 and BVV, to take advantage of new business opportunities.
For international stakeholders:
– Explore partnerships with Indian suppliers to benefit from cost-effective, high-quality aerospace components.
– Monitor India’s regulatory reforms and infrastructure investments that may impact sourcing decisions.
For policymakers:
– Continue streamlining export procedures and reducing regulatory barriers.
– Invest in advanced manufacturing technologies and skill development programs.
– Promote India’s capabilities at global aerospace forums and trade shows.
For more detailed information on India’s aerospace export policies and procedures, readers can refer to the Ministry of Civil Aviation, Government of India.
According to analysis by VisaVerge.com, India’s growing role in the global aerospace supply chain is a testament to its engineering talent, cost advantages, and supportive government policies. With continued focus on innovation, infrastructure, and international collaboration, India is well positioned to become a leading exporter of aerospace components in the years ahead.
Learn Today
OEM → Original Equipment Manufacturer; companies producing parts used in final aerospace products globally.
CAGR → Compound Annual Growth Rate; average yearly growth of aerospace exports over a set period.
IGST → Integrated Goods and Services Tax; a tax applied uniformly to imports and domestic products.
MRO → Maintenance, Repair, and Overhaul; services for aircraft upkeep and prolonging operational life.
Cape Town Convention → International treaty improving asset financing and leasing for aircraft worldwide.
This Article in a Nutshell
India’s aerospace component exports exceeded USD 2 billion annually in 2025, driven by global OEM demand, legislative reforms, and infrastructure investments, positioning India as a rising global aerospace supplier with strong growth prospects through 2028.
— By VisaVerge.com
