Will Adani Group and Embraer build commercial aircraft in India?

Brazilian aerospace giant Embraer and the Adani Group will announce a major partnership next week. The goal is to establish a commercial aircraft assembly line India. This initiative marks a significant step for domestic aerospace manufacturing. The formal Adani Embraer announcement is scheduled for January 27.

Partnership Details

The two companies will sign a Memorandum of Understanding (MoU) in New Delhi. This event will occur in the presence of Civil Aviation Minister K Rammohan Naidu. The new Final Assembly Line (FAL) will focus on Embraer civilian aircraft. These jets typically have seating capacities up to 150 passengers. Embraer is the world’s third-largest aircraft manufacturer. This move directly targets the growing Indian regional aviation sector.

Sources suggest the FAL could be located in Gujarat’s Dholera. Andhra Pradesh’s Bhogapuram is also a potential site. Adani Defence and Aerospace, a subsidiary, is leading the project. Following the FAL's operationalisation, the Adani Group may expand. They plan to manufacture aircraft components domestically.

Strategic "Make in India" Push

This joint venture strongly supports the government’s "Make in India" initiative. It aims to boost India aerospace manufacturing capabilities. India is the world's third-largest domestic aviation market. The country's aviation market is projected to grow significantly. Indian airlines have placed large orders for new aircraft.

Embraer forecasts a need for at least 500 aircraft in the 80- to 146-seat category. This demand is expected over the next two decades. This regional jet market India is key to connecting Tier 2 and Tier 3 cities. The government is considering fiscal incentives for customers. This would encourage orders for locally make planes in India.

Industry Impact and Outlook

Establishing an aircraft assembly facility is a complex process. A similar military transport project took about five years. This was from the agreement date to the first aircraft rollout. The Embraer FAL is expected to follow a similar timeline. It will likely take three to four years to become ready. This timeline highlights the long-term nature of aerospace foreign direct investment.

• Opportunity: The partnership provides a domestic supply source. This could help mitigate global supply chain delays.
• Challenge: The project must overcome concerns about commercial viability. Global planemakers have cited this as a past resistance point.
• Growth: The move diversifies India's manufacturing base. It shifts focus beyond just military transport aircraft.

Embraer has been active in India since 2005. About 50 Embraer aircraft currently operate across various segments. This includes the regional airline Star Air. The new venture will enhance Embraer’s competitiveness. It is a major step toward aviation self-reliance India.

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