Civil Aviation Offsets – for Building a Robust Civil Aircraft Industry

Abstract

In India the efforts to use the concept of leveraging offsets for growth of aerospace sector gained active interest in the early nineties with drive by some Sector leaders. The focus initially was on the commercial airliner procurement, which was growing due to fleet expansion by the public sector carriers, Air India and Indian Airlines. Their procurements at that time were banking upon Counter Trade through export of commodities or other unrelated products. The consistent efforts led to acceptance of offsets by the Ministry of Civil Aviation (MOCA), though even then it largely remained as Counter Trade. As of now, there is no laid down Policy on Civil Aviation offsets. The opportunity for leveraging Offsets for growth of Indian Civil Aerospace is great because of huge ramp up in commercial aviation being witnessed and being forecast for the long term future. Private Airlines have plans for large aircraft purchases and the Government is driving rapid modernization and creation of new Airports. This massive purchasing power can yield offsets leverage of USD 75 billion, an opportunity India should not miss. The Indian stake holders, the Private airlines, and the Government have to seize it with joint focussed agenda, the way countries like Brazil, China, Japan, South Korea, Israel have done. Further research into the factors that have hindered the percolation of offsets in the civil sector would be useful to guide the Policy direction for this segment.