Opportunities for Offset Market in Indian Aerospace and Defense Aircraft Industry, May 2016

This Lucintel brief presents offset policy overview, offset market opportunity in India, and emerging trends in Indian offset market. Some highlights of the briefing are as follows:

  • Aerospace and Defense aircraft offset opportunity in India is growing with strong fundamentals
    • India implements offset policy in both civil and defense aircraft at 30% of the contract value and minimum contract value is $70 million. 
    • Indian aerospace and defense aircraft offset market opportunity crossed ~US $1.0 Bn in 2014 and is forecast to grow at 9.5% CAGR in the next six years to reach ~US1.74 Bn in 2020
    • Defense aircraft offset accounted for 87% of the total Indian aircraft offset annual value in 2014 whereas civil aircraft with remaining 13%
  • Increasing defense spending, growing engineering services outsourcing, and increasing domestic and foreign players involvement in Indian defense industry are the key trends
    • Indian defense spending was about ~US $50 Bn in 2014 and is likely to reach US $71 Bn in 2020
    • Major Indian IT and ITES companies, such as TCS, Infosys, and HCL are contracting with global aerospace and defense OEMs, such as Boeing, Airbus, and Pratt & Whitney  
    • Major defense companies, such as Boeing, Lockheed Martin, Sikorsky, Raytheon, and Textron Systems have their long term investment strategies in India
    • International and Indian players are benefitting by partnering together for attaining low cost manufacturing for both offset and other opportunities
    • Majority of offset opportunity in India is likely to be in MRO sector, Technology, IT & ESO, Part manufacturing, Control systems, Navigation system, and Simulation and training.

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