“India, a Potential MRO Hub”

Minister of Civil Aviation and Steel Jyotiraditya M. Scindia has said that India has the potential to become a global MRO Hub. He was speaking on the various aspects of the development of the Indian aviation industry during the CAPA India’s Aviation Summit 2023.

Aerospace Manufacturing and MRO, Scindia said that as part of the Make in India campaign, the government has been focussing on ensuring India becomes an integral part of Global Supply Chains, such as in the Aviation Industry. “The launch of private manufacturing for the C-295 transport aircraft by the Airbus-Tata joint venture is a major stride towards achieving the goal of self-reliance. With Indian carriers expected to order about 1500 to 1700 aircraft in near future, we should work towards making India an Aerospace Manufacturing base.

At the same time, we have taken steps to ensure that we develop an ecosystem for MROs for aircraft. We have reduced GST rates on MRO services from 18% to 5% and allowed 100% FDI into the sector. We even liberalized MRO Guidelines. There has been significant growth in MROs since we reduced GST –by 25% (from 113 to 140 MROs approved by DGCA today). I urge our MRO industry to think big, think global, and act global – the sector has a turnover of close to USD 2 billion but our work is limited to 15 to 20 percent of the market today, which we need to ensure is fully tapped into.”, he added.

Scindia said that India has already crossed 4.56 lakh domestic passengers in a day. India will have more than 140 million passengers in FY 2024 alone, he added. In the six years from FY 2014 to FY 2020 the number of domestic passengers has more than doubled from 120 million to about 275 million at a CAGR of 14.5 % and had there been no COVID outbreak we would have reached a CAGR of about 18-20 %.

India is the third largest domestic market in the world in terms of seat capacity, but in terms of international seat capacity we are still ranked at the 18th position. Therefore, the prospect for long-term consistent growth in the market seems very strong. India’s real GDP is expected to grow to about 252 trillion rupees in FY 2030 and GDP per capita will have increased from that of a lower middle-income country to an upper middle-income country. India is witnessing increasing urbanization, and it is expected to increase from 34.9% in 2020 to a projected 40 % in 2030. The disposable income of middle and high-income households is rising much faster than the national average. India is going to have one of the largest young populations in the World, which usually has a greater propensity to travel.

Commenting on resolving supply-side challenges he said that the Government under the leadership of PM Narendra Modi has been taking unprecedented steps to create capacities, remove bottlenecks and simplify processes so that the nation can have the requisite aviation infrastructure in place. The focus is to ensure that in 2047 when the nation celebrates 100 years of its independence, it has an aviation system that can support USD 20 Trillion economy. As part of this vision, the government has doubled the number of Airports in the last 8.5 years increasing from 74 in 2014 to 148 now. The union government is simplifying regulations to ensure ease of business in the sector. Policies have been liberalised so as to ensure adequate availability of Pilots, Cabin Crew, Engineers, etc in the country. In the last three years alone, the ATCO staffing position has improved by almost 33% and in comparison, to 2702 filled posts in 2019, today there are more than 3692 filled posts. In addition, we are expecting another 396 ATC staff to be recruited this year.

Speaking on the development of the Drone Industry in the country the Minister said that the size of the Drone market is projected to increase from Rs 2900 Crore in 2020 to about Rs 77,300 Crore in 2025 at a CAGR of 80% and is further expected to reach up to Rs 2,95,000 Crore by 2030. In terms of employment potential, it is close to 3 Lakh people both in manufacturing and Drone Flying. In order to fully realize the potential of Drones for the Indian Economy, several steps have been taken, including notification of New Drone Rules 2021 under which several licenses, fees, and forms have been eliminated. Drone Airspace Map was published on 24th Sep 2021 – 90% of India is now a green zone where no permission is required to operate a drone. PLI scheme has been there to promote Drone manufacturing. As a result, we are seeing widespread adoption of Drones in the country across sectors and an increase in Drone manufacturing, the minister said.

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