India's Budget 2026-27 Targets Aircraft Manufacturing Ecosystem Growth

Union Civil Aviation Minister Ram Mohan Naidu praised the 2026-27 Union Budget. He called the civil aviation sector a primary beneficiary. The budget provides a clear roadmap for growth. This plan aims to establish a robust aircraft manufacturing ecosystem in India.

Rajasthan Deputy Chief Minister Diya Kumari also hailed the budget. She noted it lays the foundation for 'Viksit Bharat.' The budget strengthens the economy. This helps India become a major global power.

Policy Shift: Boosting Domestic Production

The Minister emphasized a focus on domestic manufacturing. India currently buys planes from foreign Original Equipment Manufacturers (OEMs). The new budget seeks to change this reliance. The goal is 'Atmanirbharta,' or self-reliance. India wants to design, manufacture, and maintain aircraft.

Customs Duty Exemptions

A key measure is customs duty exemptions. These apply to parts for civilian and trainer aircraft. This policy will significantly boost India aircraft manufacturing ecosystem. It also supports Maintenance, Repair, and Overhaul (MRO) activities. Lower input costs make domestic MRO more competitive. This addresses a current industry bottleneck.

Minister Naidu highlighted new industry partnerships. Brazilian aerospace giant Embraer is partnering with Adani Aerospace. This aims to manufacture aircraft domestically. Additionally, Russia is tying up with Hindustan Aeronautics Limited (HAL). These collaborations show the budget's positive policy direction.

Aviation Market Context and Infrastructure

The Indian aviation sector growth remains exponential. India is the world's third-largest domestic market. Passenger traffic is projected to reach 665 million by FY31. The country will require over 2,200 aircraft by 2042. This massive demand necessitates local production.

This budget also features a major infrastructure push. Public capital expenditure increased to Rs 12.2 lakh crore for FY 2026-27. This is up from Rs 11.2 lakh crore the previous year. Key initiatives include seven new high-speed rail corridors. New dedicated freight corridors are also planned. These efforts support overall logistics and connectivity.

The Ministry of Civil Aviation (MoCA) is focused on capacity. The government is also standardizing pilot training. This prepares for the projected demand for 30,000 aviators. The overall goal is transforming India. It will become a comprehensive aerospace hub.

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