Aerospace & Defense

Opportunities for Offset Market in Indian Aerospace and Defense Aircraft Industry

Published on May 17, 2016

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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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