Commerce and Industry Minister Piyush Goyal has called for greater presence of US-based aircraft manufacturer Boeing in India, following Tata Group-owned Air India’s recent order for 470 planes from both Airbus and Boeing. The large deal is estimated to be worth $80bn, and Goyal believes Boeing should increase its presence in the country as bilateral trade between India and the US is expanding at a healthy rate. Goyal is aiming for a four-fold increase in trade between the two nations, with a target of $500bn by 2030. Boeing already has a presence in India, with facilities in Mumbai, Hyderabad and Bengaluru, and has supplied a large portion of Air India’s fleet for several years. The call from Goyal may indicate an effort to strengthen ties between the two nations, which have faced diplomatic tensions in recent years.
India’s burgeoning aviation industry is an attractive market for Boeing, and the company has previously expressed its interest in increasing its presence in the country. However, its plans to establish a manufacturing plant in India in partnership with Tata Advanced Systems were abandoned in 2020 due to the economic impact of the pandemic. Despite this setback, Boeing has continued to invest in India, and has established partnerships with several Indian companies in the aviation and aerospace sectors. The company has also supplied several military aircraft to the Indian Air Force, and is in the running to supply the Indian Navy with carrier-based fighter jets.
Air India’s large order for planes is part of the government’s efforts to privatise the airline, which has struggled financially in recent years. The company has a debt of over $8bn, and has suffered from declining revenues due to competition from low-cost carriers. The government has attempted to privatise the airline several times in the past, but has faced opposition from employee unions and other groups. The current plan involves the sale of the airline to a private bidder, with the government retaining a 24% stake in the company. The large order of planes is seen as a positive step towards making the airline more attractive to potential buyers.
Boeing’s increased presence in India could also have geopolitical implications, as the US seeks to strengthen its ties with India in the face of increasing Chinese influence in the region. India and the US have been working to strengthen their defence ties in recent years, and the two nations have conducted several joint military exercises. India is also a member of the Quadrilateral Security Dialogue, a grouping of four countries (the US, India, Japan and Australia) that seek to promote security and stability in the Indo-Pacific region. The US has been seeking to build a coalition of countries to counter China’s growing influence in the region, and India is seen as a key partner in this effort.
