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India in talks with Airbus and Boeing for Indian assembly lines

India is contacting Airbus and Boeing about establishing final assembly lines there.

According to rumors in the Indian media, Airbus and Boeing may have been contacted by the Indian government over the prospect of building up final assembly lines (FAL) for their commercial aircraft in India.

This request would be motivated by the unprecedented volume of orders India’s airlines are placing with the two major manufacturers.

Following Tata Sons’ ownership of the company, Air India is reportedly preparing a big 500-ship order that will be split between Airbus and Boeing. If verified, this would build on existing pledges made by low-cost carrier Indigo, which in recent years placed orders for up to 730 Airbus A320-family aircraft, and startup airline Akasa Air, which has 72 Boeing aircraft on order in addition to smaller orders from other airlines in the nation.

Over the course of the next ten years, Indian airlines are expected to add almost 2,000 aircraft to their fleets. These are the kinds of data that can have an impact on trade statistics. The Indian government is reportedly worried about the impact on the trade deficit of the double-digit growth in aircraft imports and the associated spare parts.

A final assembly line in India would additionally require the growth of regional supply chains, with commensurate knock-on impacts to the rest of the economy.

With assembly lines for its best-selling A320 family in the US (Mobile, Alabama) and China (Tianjin), in addition to its original facilities in Europe, Airbus has so far pioneered a more international production approach among the main aircraft manufacturers (in Toulouse, France, and Hamburg, Germany).

The US owns every FAL produced by Boeing. Airbus already collaborated with Tata, a company whose division controls Air India, to construct the C295 military plane for the Indian Air Force in Vadodara, Gujarat, so establishing an assembly site there would not be entirely unusual.

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