Need more orders to establish assembly line in India: Boeing
What's the story
US aerospace giant Boeing has said it needs more orders from India before it can think of setting up a civil aircraft assembly line in the country.
The statement comes as a potential blow to the Indian government's hopes of producing commercial jets at home.
Boeing India and South Asia President Salil Gupte shared these insights with Reuters at the Aero India show in Bengaluru.
Market analysis
Perspective on Indian market and assembly prospects
Gupte said the business case for final assembly in any region has to be much bigger than what the Indian market offers today.
He stressed that this process requires more number of airplanes than what is currently being bought in India.
"We'll have to see how it evolves as the markets in India and around India go," Gupte said, taking a watchful approach.
Sector expansion
Indian aviation sector's growth and Boeing's current operations
Indian airlines, such as Tata's Air India and IndiGo, have around 1,800 aircraft on order with global manufacturers and are due to receive 130 jets this year.
Despite the growth, Gupte emphasized that final assembly is less than 10% of an airplane's value proposition.
He said the "real money" is in all other processes leading up to that stage.
Currently, Boeing sources $1.25 billion worth products and services from over 300 suppliers in India annually.
Joint venture
Collaboration with Tata Group and supply chain challenges
Boeing has a joint venture with Tata Group to produce AH-64 Apache helicopter fuselages and 737 aircraft's vertical fin structures for global clients.
On supply chain issues, Gupte recommended the Indian government incentivize suppliers to lower capital costs in India, aiding the expansion of the aerospace supply chain.
"We had very candid conversations (with the civil aviation ministry) and they are willing to take those conversations forward with other departments," he said.