Leading manufacturers in the global aviation and aerospace sector have begun closely examining the terms of the India–US bilateral trade agreement, signalling growing interest in its potential impact.
According to news agency reports citing multiple sources, companies are studying the agreement with an eye on expanding their footprint in the world’s fastest-growing aviation market. The development has fuelled speculation about significant changes the deal could bring to India’s aerospace industry, particularly in areas such as exports, investment flows and production capacity.
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One of the most important aspects of the agreement is the complete removal of tariffs on aircraft components exported from India to America. As a result, India has secured a place alongside established international supply chains like Europe, Japan and South Korea. According to government officials, while some operational clarity is still pending, the matter will become clear within the next few days. However, they are optimistic that if this decision is implemented, India's aerospace exports could increase significantly.
Notably, aircraft manufacturer Airbus currently purchases aircraft components worth $1.5 billion annually from India. For another aircraft manufacturer, Boeing, this amount is approximately $1.25 billion per year.
Boeing to double imports from India
In this context, Boeing has already indicated that it will double its component imports from India. According to Union Commerce and Industry Minister Piyush Goyal, India could emerge as one of Boeing's largest foreign component suppliers within the next few years. Simultaneously, under the agreement, import duties on aerospace products have been reduced from 50 percent to 18 percent, which experts believe will bring significant relief to the domestic supply chain.
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The impact of this tariff reduction could also affect the ordering plans of Indian airlines. Currently, Boeing has orders worth approximately $50 billion from companies like Air India Group and Akasa Air. Industry sources claim that IndiGo may soon place a large order for wide-body aircraft, which Boeing is closely monitoring.
Salil Gupte, President of Boeing in India, has stated that this trade agreement has opened doors to multifaceted opportunities and can give new momentum to bilateral trade and economic relations. According to government estimates, Indian airlines led by Air India and IndiGo could place orders worth $70 to $80 billion for aircraft, engines and spare parts in the coming days.
Although all of India's airlines are privately owned and do not fall under offset obligations, officials have stated that, due to the influence of the 'Make in India' policy, aircraft manufacturers are gradually increasing their component procurement from India. If new orders are implemented, Boeing is expected to at least double its purchases from Indian suppliers. Overall, experts believe that the India-US trade agreement could become an important milestone in strengthening India's aerospace industry on the international map.
