INDIA'S POTENTIAL AS A MAJOR MRO HUB

With the changes in taxation policy, India’s MRO industry for the first time will be able to see light at the end of the tunnel

- SUKHCHAIN SINGH

THE CURRENT MARKET SIZE of the Maintenance, Repair and Overhaul (MRO) industry in India which is assessed at about $700 to $800 million, is expected to grow at 7.7 per cent annually over the next decade. This is more than three times the global rate. The demand is being driven by a fleet growing at 9.9 per cent annually to a projected figure of over 2,300 in FY 2040. Indian airlines will become the third largest buyer of commercial passenger planes in the world, only behind the United State (US) and China. The growth is also being boosted by the expansion and development of new airports, fast expanding Low Cost Carriers, a liberal Foreign Direct Investment policy, increasing adoption of new technology and focus on regional connectivity.

Despite an increasing fleet, the MRO industry continues to struggle for relevance. India needs to build a robust domestic MRO ecosystem. There are about 40 overseas entities approved by the Directorate General of Civil Aviation (DGCA) to conduct MRO on India-registered aircraft which in itself accounts for over 90 per cent of the MRO of the Indian carriers. According to the Economic Survey for 2019-20, the annual import of MRO services by Indian carriers was around ₹9,700 crore. “With airlines fleet growing annually by 100, the size of domestic and imported Indian airline MRO is set to grow annually to ₹21,600 crore in the next five years and to ₹36,000 crore once the fleet size reaches 2,000 aircraft,” the Survey said.