Capacity creation or more imports? India needs to decide on one, says Boeing

Mumbai: Promising an aviation manufacturing ecosystem, US aircraft maker Boeing, which has for long been losing defence-related orders from India to the likes of French Rafale, on Tuesday said it is up to the government to decide if it wants to continue imports or build capacity locally.

Capacity creation or more imports? India needs to decide on one, says Boeing

Boeing seeks to build an aviation ecosystem in India. Reuters

"India has to make a decision whether it wants to keep buying from France or want to create industrial capacity. At
the end of the day, India has to decide, from creating an industrial capacity point of view, who is the right partner," Boeing India president Pratyush Kumar told PTI in Mumbai on the sidelines of the 'Make in India Week'.

He was responding to a query on New Delhi placing an order of 36 fighter jets with French defence major Rafale earlier in a multi-billion dollar deal. The terms of the deal also involve domestic assembly over a period of time. For long, India has been sourcing from Europe and Russia.

"What we're offering is a different proposition to create an entire ecosystem for aerospace, not just the final assembly of aircraft," Kumar said.

His comments follow recent announcement from another European major Saab that it's ready to go the whole hog on
local manufacturing in the country.

Noting that India has overdependence on foreign technologies, he said, "If you want to break that cycle and grow industrial capacity, you've to think differently."

On the difference that Boeing can bring to the table, he said, "How do you make different components, the avionics,
the systems... and then integrate them, which is our differentiated offering."

He cited the American experience of manufacturing the Super Hornets, saying over 2,000 companies from 44 states
contribute to the process.

Kumar also claimed that over the past 14 months, the company has more than doubled its sourcing from the country,
but refused to put a figure to it.

It is estimated that both Boeing and Airbus source parts like fuselage, doors and other spare parts worth $1 billion each from India.

He further said local manufacturing is not just about creating jobs alone, it is about creating industrial capacity.

"Jobs will automatically follow. How do you create the industrial capacity to build complex technologies?"

Kumar also sounded bullish about the domestic aviation market and said he expects to corner at least 50 per cent of
the projected 1,700 new aircraft orders from the country over the next two decades.

"We are estimating that over 1,700 aircraft will be ordered in India over the next 20 years. There are tremendous
growth opportunities... we are targeting more than half of that (1,700)," he said.

Late last year, Boeing had projected that Indian civil aviation sector will grow by 1,700 units over the next two
decades. The domestic commercial aviation market is already the fastest growing in the world with more than 20 percent growth.

He said unlike IndiGo, which has placed a whopping 430 orders with Airbus for a very long term, the orders that
Boeing gets are of short-term horizon.

"Our customers like Air India, Jet Airways and SpiceJet have ordered for shorter time-frame horizon. So, they'll come back and order," he said.

Asked about the success of the home-grown light aircraft Tejas, he said there is room for everyone as the middle class market is growing faster, increasing the propensity to travel.

"We see the market to continue to grow," he said.


Firstpost is now on WhatsApp. For the latest analysis, commentary and news updates, sign up for our WhatsApp services. Just go to and hit the Subscribe button.

Updated Date: Feb 16, 2016 15:57:33 IST

Also See