Top export sector for Indian market


 Report on Market for aircraft and parts in India

Did you know?

It is only a matter of time before foreign airlines are allowed into India's domestic airline sector.


Aviation equipment and services

(in US$ million)

Aviation equipment and services 1995 1996 1997*
Total market size

145

195

215

Locally manufactured 104 136 146
Total exports nil nil nil
Total imports 41 59 69
Exchange rate: US$1 = Rs. 32.75 34.95 35.00
Source: Independent studies
*1997 figures are estimates

 
Promising sub-sectors

1997* market size (US$ mn)

Air traffic control and service equipment

95

Private sector participation in new airports on a BOT basis

35

Specialised ground handling and terminal equipment

30

Points to be noted:

  • The federal government estimates civil aviation to grow by 8 per cent annually as a result of 6 per cent GDP and 12 per cent industrial growth rates over the next many years. Actual performance in 1995-96 and 1996-97 have been in the vicinity of these figures.

  • India's Ninth Five-Year Plan (1997-2002) has earmarked Rs. 4,000 crores (approximately US$1,000 million at an exchange rate of US$1=Rs.40) for installation and/or upgrading Airport Traffic Control/Air Traffic Systems (ATC/ATS), aviation ground support facilities, upgradation/construction of new terminal buildings and runway facilities, and conservation and safety equipment.

  • The entry of private airlines in the domestic aviation sector as a result of an open sky policy will increase demand for aviation equipment. Even though most private airlines had a bad start due to their inexperience in aviation as well as government restrictions on them, they now seem to have recovered and hold good promise for the future.

  • Responsibility for constructing, operating and maintaining international airports rests with the International Airports Authority of India (IAAI) and domestic airports with the Airport Authority of India (AAI), except for airports involving the private sector.

  • The decision to allow private sector involvement in construction, operations and maintenance of airports is a a further sign of liberalisation. In this connection, two state governments (Kerala and Karnataka) have been given clearance for airports with private sector involvement. These airports will be located in Cochin (in Kerala state) and Bangalore (in Karnataka state).

  • The government of Punjab state is also considering a new airport with private sector involvement. A new airport has also been planned for Mumbai (formerly Bombay) with private sector participation.

  • Foreign companies should note that indigenous manufacturing capability exists in India for most aviation communication equipment except the most sophisticated radar systems. To reduce imports of such equipment, the government is encouraging the domestic private sector to have technology tie-ups with foreign companies under which the local companies would manufacture those same products after initial imports.

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