Every year, India loses millions of dollars as over 85% of its Maintenance, Repair, and Overhaul (MRO) services are outsourced overseas. This not only results in significant foreign exchange outflow but also leads to prolonged aircraft downtime. However, recent policy initiatives and strategic interventions by the government are positioning India to reverse this trend and emerge as a global MRO hub.
According to a NITI Aayog report, the Indian MRO market, which was valued at approximately USD 1.7 billion in 2021, is projected to reach USD 4 billion by 2031, growing at a robust CAGR of 8.9%. This far outpaces the global average of 5.6%, reflecting the transformative shifts underway in the Indian aerospace ecosystem and signalling significant potential for investment and innovation.
The Growth of the MRO Industry
Several factors are driving the growth of the MRO industry. The rising number of ageing commercial and defence aircraft is increasing the demand for routine maintenance and component replacements. Simultaneously, technological advancements—such as predictive maintenance, AI-based diagnostics, and automation—are revolutionising MRO practices, enhancing precision, reliability, and turnaround time.
Moreover, the rapid increase in passenger and cargo air traffic has intensified the need for dependable MRO services to ensure continuous fleet availability. Stricter global safety and compliance standards are also compelling operators to adopt best-in-class maintenance practices, fuelling further demand.
Recognising the sector’s importance, the Indian government has implemented several supportive measures. These include tax reductions for MRO services and directives to airport operators to allocate land for MRO units at equitable rates. States such as Uttar Pradesh, Maharashtra, and Telangana are proactively developing dedicated aerospace and MRO corridors with integrated clusters comprising hangars, test beds, logistics centres, and R&D units.
India’s growing global stature was recently underscored by the return of the International Air Transport Association (IATA) Annual General Meeting to Indian soil after 42 years. In his remarks at the event, the Hon’ble Prime Minister emphasised India’s emergence as the world’s third-largest domestic aviation market, driven by record aircraft orders exceeding 2,000, expansion of domestic connectivity under the UDAN scheme, and an ambitious vision to establish 350 airports by 2047. These developments are fuelling not only aviation growth, broader economic and cultural exchange, but more importantly, the demand for home-grown MRO services.
The Bigger Picture: Domestic Manufacturing
While MRO is a critical component, it fits into the larger national strategy of self-reliance through design and manufacturing in India. Building a globally competitive and self-sustaining MRO ecosystem will reduce reliance on overseas service providers, retain capital within the country, and improve turnaround times for domestic carriers. However, physical infrastructure and capital alone are not enough. A significant constraint remains in the area of skilled manpower and domestic supply chain for the supply of critical components, which are approved by platform OEMs. Despite India’s deep engineering talent pool, the industry faces a shortfall in aviation-specific competencies, including internationally recognised certifications such as those from the European Union Aviation Safety Agency (EASA) and the Federal Aviation Administration (FAA). Bridging this gap through focused training programs, certification courses, and hands-on exposure to modern aircraft systems is essential to meeting global standards and attracting high-value contracts from international airlines and OEMs. The government of India has initiated measures to address the reliance on overseas approved component suppliers in the supply chain by including Indian industry in the policy changes, which, when implemented, are bound to give an impetus to domestic component suppliers, distribution networks, strengthen the India-based supply chain.
Conclusion
India stands at the cusp of a transformative shift in the MRO landscape. With strategic policy support, a growing domestic aviation base, and advancements in indigenous capabilities, the country is well on its way to building a robust and internationally competitive MRO industry. By strengthening infrastructure, investing in skill development, and encouraging innovation, India has the potential to become a cost-efficient global hub for aircraft maintenance and engineering services.
This article is authored by Mr. Louis Pereira, Vice President Quality at Rossell Techsys. All views are of the author’s own and do not necessarily reflect those of Logistics Insider.
