India Aircraft MRO Market Outlook to 2030

India Aircraft MRO Market Overview

• The India Aircraft Maintenance, Repair, and Overhaul (MRO) market is valued at USD 2.0 billion, according to a five-year historical analysis. The growth in this market is driven by the expansion of Indias aviation industry, increased air traffic, and a focus on enhancing the operational efficiency of aircraft fleets. The Indian governments initiatives to boost the domestic MRO sector through tax reforms, infrastructure development, and policy support have further propelled this market.
• Major hubs for aircraft MRO activities in India are concentrated in regions with high air traffic, such as Delhi, Mumbai, Bengaluru, and Hyderabad. These cities offer access to state-of-the-art facilities, skilled labor, and a favorable regulatory environment. The growing fleet of both commercial and defense aircraft, coupled with the increasing need for efficient and cost-effective maintenance, drives MRO demand across the country.
• The Indian governments policy initiatives, such as the National Civil Aviation Policy (NCAP) 2016 and the reduction in Goods and Services Tax (GST) on MRO services from 18% to 5%, have significantly bolstered market growth. Additionally, partnerships between Indian and global MRO service providers have enhanced technical expertise and infrastructure, boosting the competitiveness of the domestic MRO industry.

India Aircraft MRO Market Segmentation

• By Service Type: The market is segmented by service type into airframe maintenance, engine overhaul, component repair, line maintenance, and modifications. Engine overhaul holds the largest share due to the high cost and frequency of engine maintenance required to ensure aircraft safety and performance. Airframe maintenance is also a key segment, driven by the need for periodic structural repairs and refurbishments.

• By Aircraft Type: The market is segmented into narrow-body, wide-body, regional jets, and military aircraft. Narrow-body aircraft dominate the market share due to their prevalent use in domestic and short-haul international flights, which require frequent maintenance. Military aircraft MRO is also gaining traction with government initiatives to enhance the operational readiness of defense fleets.

India Aircraft MRO Market Competitive Landscape

The market is competitive, with both domestic and international players seeking to expand their presence in Indias growing aviation sector. Key players like Air Works, GMR Aero Technic, and Taneja Aerospace & Aviation Ltd. are leveraging strategic partnerships, investments in technology, and compliance with global aviation standards to remain competitive. The entry of global MRO giants like Lufthansa Technik and ST Engineering through joint ventures with Indian firms has also boosted market competition.

India Aircraft MRO Industry Analysis Growth Drivers

• Rising Air Passenger Traffic (Increased demand for commercial aircraft MRO)
  India's aviation sector is experiencing substantial growth, with air passenger traffic reaching over 154 million in 2023, reflecting a growth of around 13% compared to the previous year, supported by domestic and international routes. The increasing number of passengers has directly escalated demand for aircraft maintenance, repair, and overhaul (MRO) services to ensure operational safety and efficiency. The civil aviation market has seen a marked increase in the frequency of flights, prompting a proportional rise in MRO requirements for both new and aging fleets. As the Indian middle class grows, air travel will continue expanding, driving the need for comprehensive MRO solutions.
• Expansion of Fleet Size (Airlines expanding to meet rising demand)
  Indian airlines are aggressively expanding their fleets, with plans to add over 1,200 aircraft by 2025, out of which Air India has placed a record order for 470 aircraft, with an option for an additional 370. Currently, Indias active fleet stands at around 700 commercial aircraft, a significant rise from 600 in 2020. The increase in fleet size, coupled with rising air travel demand, is putting a spotlight on the MRO sector. Airlines such as Indigo, SpiceJet, and Air India have placed substantial orders for new aircraft, all of which require regular and high-standard maintenance services. This fleet expansion drives the growing necessity for domestic MRO facilities to reduce dependence on foreign services.
• Growth in Defense Procurement (Increased defense aircraft MRO demand): Indias defense sector is witnessing significant growth, with a projected defense budget exceeding USD 74 billion by the end of 2024. The increased procurement of military aircraft, both through domestic production and imports, has amplified the need for robust MRO infrastructure to service defense aircraft. India's fighter jet fleet, including the Sukhoi-30MKI and newly inducted Rafale aircraft, requires extensive maintenance programs, presenting a huge opportunity for domestic MRO players. The governments 'Atmanirbhar Bharat' initiative is further encouraging local MRO services to reduce dependence on foreign firms for defense-related repairs.

Market Challenges:

• Infrastructure Limitations (Limited Hangar Space and Facilities): One of the major challenges faced by the MRO industry in India is the lack of sufficient infrastructure, including hangar space and advanced maintenance facilities. While the government is making efforts to address this through initiatives like the National Civil Aviation Policy, the industry still struggles with infrastructure bottlenecks, leading some airlines to seek MRO services abroad.
• Skilled Labor Shortage (Limited Trained Personnel): Despite Indias growing aviation sector, there is a shortage of skilled labor in the MRO industry. The lack of adequately trained personnel for specialized maintenance tasks, such as engine overhauls and avionics repairs, remains a significant challenge. While institutions are offering more aviation-related training programs, it will take time to bridge the gap between demand and supply of skilled labor.

India Aircraft MRO Market Future Outlook

The India Aircraft MRO market is expected to witness robust growth over the next five years, driven by the expansion of the aviation sector, government incentives, and technological advancements. The rise of low-cost carriers, coupled with the growing defense sector, is expected to fuel demand for MRO services. Partnerships with global MRO players, investments in infrastructure, and the adoption of advanced maintenance technologies will be key to the future success of the market.

Future Market Opportunities

• Development of Indigenous MRO Capabilities: India's 'Make in India' initiative aims to boost the local MRO sector by encouraging domestic production of components and fostering partnerships with international companies. In 2024, the Indian government announced plans to attract investments worth millions for MRO infrastructure development. This shift toward indigenous capabilities is expected to significantly reduce the annual USD 1.5 billion spent by Indian airlines on overseas MRO services. Enhanced domestic MRO capabilities will not only lower costs for airlines but also position India as a regional MRO hub for neighboring countries.
• Digital Transformation (Use of predictive maintenance and IoT): India's MRO sector is rapidly adopting digital technologies such as predictive maintenance powered by IoT, big data, and AI. Predictive maintenance helps reduce downtime by detecting potential issues before they result in failures, improving aircraft turnaround time and reliability. In 2024, Indian airlines began integrating these technologies, enabling real-time monitoring of aircraft systems and components. Digital transformation is estimated to reduce aircraft maintenance costs by nearly 20% annually. With Indias growing emphasis on digital infrastructure, MRO operators are increasingly investing in these innovations to streamline operations.