An interim trade framework between India and the United States will remove tariffs on selected aircraft and aircraft parts, a move expected to strengthen cross-border aerospace sourcing and industrial supply flows.
Commerce and Industry Minister Piyush Goyal said Boeing and Airbus are already major buyers of aircraft components and services from India and are evaluating the country as their last foreign original equipment manufacturer (OEM) base for parts going forward.
Boeing currently has more than 265 commercial and military aircraft operating in India, underscoring the market’s operational significance. The company works with over 325 suppliers in India, with annual sourcing valued at more than $125 billion, including components and services.
Airbus sources approximately $1.4 billion worth of components and services from India and has indicated plans to increase this figure to $2 billion by 2030. Under the interim framework, tariffs will be reduced to zero on various goods, including generic pharmaceuticals and aircraft parts.
Boeing, India and South Asia President, Salil Gupte, stated that the agreement opens “multifold opportunities” and reiterated the company’s longstanding support for a zero-for-zero tariff approach in aerospace and defence due to its impact on travel, connectivity and industrial activity.
“This deal creates momentum to extend that principle, which would boost industrial growth, strengthen national security, and deliver win-win opportunities for both countries,” Gupte said in a statement.
Industry executives also noted that the removal of tariffs is expected to improve cash flows and cost competitiveness across the aerospace supply chain. The agreement establishes a revised trade framework that could support expanded sourcing, supplier participation, and component exports in the aerospace and engineered goods sector.
Attribution:
Source: Business Standard (syndicated report), “India-US trade pact boosts Boeing’s parts sourcing from India: Goyal.”
Business Today, “US trade deal to boost Indian aerospace manufacturing”
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