Why has Airbus Decided to Source Components From India?
India has become a leading sourcing destination due to its vast engineering and IT talent pool, supportive government initiatives and cost-effective manufacturing.
Its rapidly growing domestic aviation market also makes local sourcing more commercially viable for leading aerospace companies.
Airbus already has more than 700 planes operating in India and an order book in excess of 1,300 aircraft.
Elsewhere, Air India (AI) have pledged to 50 A350 wide-body aircraft and IndiGo (6E) have placed vast orders of more than 900 planes.
In light of this, Airbus is widening its strategic partnership with India and is aiming to increase its annual sourcing to US$2bn by 2030.
Guillaume Faury, CEO of Airbus, spoke to Indian journalists on the sideline of the Airbus Summit 2025 in Toulouse on 25 March: “India should play on its strengths and not try to replicate what others have been doing in the past. India is really a fantastic asset in engineering, IT, systems and software, I think that is where India has a win-win from both sides,
“Our challenge at Airbus is to support the speed of growth of the aviation industry in India... the growth trajectory of India is significantly ahead of that of the world. The challenges are with respect to expertise, HR, hiring, training... (and maintaining) the growth in the best possible conditions.”
Airbus’s procurement strategy in India
Airbus strives to craft an efficient supplier ecosystem in India as part of its aim to increase annual spending by 2030.
This expansion will enhance long-term collaborations across manufacturing, engineering and services while securing cost-effective procurement.
Airbus is committed to scaling its local supply chain by working alongside several Indian industrial and engineering firms, such as Mahindra Group, Tata Group and Dynamatic Technologies.
Airbus has worked closely with Tata Group on the Final Assembly Line for C295 military aircraft in Vadodara.
They were also awarded contracts for the manufacture of A220 Family aircraft doors with Dynamatic Technologies.
By partnering with these companies, Airbus demonstrates its confidence in India’s capabilities in system integration and high-value engineering.
Airbus remains committed to utilising India’s position as a hub for engineering excellence by investing in IT and software for aircraft systems to bring added value to international operations.
The aerospace company continues to craft a technical and strategic supply chain by integrating Indian firms into its core engineering and manufacturing workflows. It employs more than 3,600 people across several sites and supports over 15,000 jobs throughout its supply chain.
Challenges in building a scalable supply base
Airbus have set themselves an ambitious target of US$2bn in procurement by 2030.
While this long-term engagement will benefit the country, it is bound to come with challenges.
India’s aerospace industry still faces a shortage of highly skilled professionals in systems integration and manufacturing, meaning Airbus may face bottlenecks and difficulties when scaling engineering-intensive supply chains at pace.
However, it continues to promote skill development initiatives and local training programmes to ensure suppliers can meet global certification requirements.
Joint ventures – such as the FAL for C295 military transport aircraft with Tata Group – allow Airbus to handle potential delays in supply chain execution from poor industrial infrastructure by building dedicated infrastructure.
Compliance with global quality standards fluctuates across Indian SMEs and suppliers, creating a need for extensive auditing and training and risk to supply chain consistency. Airbus must work closely with partners to offer guidance on standard operating procedures and certification.
As Airbus strives to create a world-class aerospace supply base in India, it must overcome capability and structural gaps. By focusing on strategic investment in infrastructure, people and compliance, Airbus can ensure India can become a vital part of its global supply chain.
How will procurement unlock further growth?
Airbus’s rise in procurement from India will allow the aerospace company to secure scalable and cost-effective supply for its global operations while deepening its integration with one of the world’s fastest-growing aviation markets.
It will catalyse the development of a wider aerospace ecosystem and secure its engineering capabilities by investing in local capabilities.
As a result, Airbus will enhance job creation across the services, manufacturing and technology industries and attract more foreign investment.
The decision to increase procurement spend in India will help enhance sustained growth both both the Indian aerospace industry and Airbus.
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