Currently, India, the second largest aviation industry of the world, is riding high with over 8% economic growth coupled with a developing middleclass, and a burgeoning base of air travelers. The rising need for amending the present fleet of fighter jets adds to India’s positives and makes it an exciting market full of untapped opportunities.
Aero India 2007, which held in Bangalore (India) recently, registered the participation of big aerospace companies and inking of alliances and investment agreements.
India, following worldwide trends, proclaimed its own offset policy for procurement contracts. The defense quota being constantly growing, the competition among the defense suppliers from US, Russia, and Europe is tough. This opens the doors of opportunities for manufacturers and GSP (Global Service Providers) in India.
Rising demand from the defense and aviation sector of India along with the State’s procurement offset policy contributed to the surge in participation and alliances.
The offset policy drafted by the State and related to defense procurements has been extended to buy state-owned carriers also such as Indian (previously Indian Airlines), and Air India.
The offset policy anticipates the beneficiary holders to infuse 30% of the deal value in India (if the total worth of deal goes beyond $70 Million) by establishing training facilities, technology sharing, sourcing components, or using IT services from GSPs based in India.
The worldwide aerospace players have a preference for services of GSPs from India, like Infosys, Satyam, HCL, Wipro, and TCS, whose GDM (Global Delivery System) have been valued on international scale. This will result in global players easily meeting the offset requirement of 30%.
India is making it niche as a manufacturing hub, thanks to its influential technical expertise and cost-efficient environment. The manufacturing segment is projected to be another main beneficiary of the State’ offset policy, and this is likely to result in deals cut across the 30% offset limit.
RNCOS report “Global Aerospace Market Forecast (2006-2009)” says, Indian aerospace industry is witnessing three main trends – fast growth in civil aviation, development in manufacturing (especially in the private sector), and emergence of India as an aerospace technology-sourcing center.
The market research report gives an insight into the global aerospace industry with focus on prominent economies of the world with well-established aerospace industries. It gives a rational analysis of the current trends, opportunities, market characteristics, and future outlook with situation and impact analysis and sensitivity and success factors.
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