Hyderabad: The free trade agreement (FTA) between India and the European Union (EU) may not immediately lower costs for aircraft maintenance or spare parts, as India has already capped the tax on imports of most components at 5%.
The India-EU FTA eliminates tariffs on aircraft and spacecraft for almost all products, including aircraft parts and components, engines, avionics, landing gear, maintenance, repair and overhaul (MRO) inputs, which would offer only limited gains to the European spare parts suppliers.
As such, American aircraft maker Boeing does not expect the recently-concluded India-EU FTA to materially affect its maintenance and repair operations in India, even though the pact could marginally lower costs for its European rival Airbus.
“The reality is that the duties were already capped at 5%, for most parts coming in for MRO and repair maintenance purposes already, by the government. So, I’m not sure whether that reduction necessarily matters from an MRO standpoint,” Salil Gupte, president, Boeing India and South Asia, told Mint in an interview at Wings India 2026 in Hyderabad.
He was responding to a question on whether lower duties for European manufacturers could give Airbus a cost advantage in India.
“Where it might matter is for things like Airbus’s C295 final assembly line or something like that. And so, we’ll have to see how that evolves over time. But I think it’s too early to tell,” he said.
The Airbus C295 final assembly line (FAL) in Vadodara, inaugurated in October 2024, is not for commercial aviation, but rather a dedicated facility for military and defence manufacturing. Operated by Tata Advanced Systems Ltd (TASL) and Airbus, this facility is assembling 40 C295 tactical transport aircraft for the Indian Air Force (IAF) to replace their legacy Avro fleet, with the first "Made in India" unit scheduled for 2026.
“No impact on aircraft and component procurement prices. Zero tariff for line for line items,” Jürgen Westermeier, president and managing director—India and South Asia, Airbus, said.
Under the FTA, import duties on civil aircraft and related parts, currently at 11% in some categories, are expected to be phased down over several years. This could, in theory, lower acquisition costs for European-made aircraft and components, potentially strengthening Airbus’s pricing position in India.
Airbus already dominates India’s narrow-body commercial aircraft market. IndiGo, the country’s largest airline, has an all-Airbus fleet.
In 2025, Airbus delivered 55 jets to IndiGo, its largest customer globally. In comparison, other Indian carriers had taken delivery of 19 Boeing aircraft in 2025.
Gupte said that Boeing expects to maintain a steady delivery pace to Indian airlines “over the next couple of years”.
Boeing has already ramped up production at its US facilities, with narrow-body aircraft output rising to 42 a month from 38 and set to increase further to 47 soon. Wide-body aircraft production will also be increased to 10 a month from the current seven, in a move expected to speed up aircraft deliveries.
“On average, you can expect, over the next couple years, roughly two aircraft a month. And in some months it’ll be more, and some months it’ll be less, and some months there’ll be a wide-body aircraft in there as well,” Gupte said.
Near-term deliveries to Indian airlines will largely consist of narrow-body aircraft, though wide-body ones will be inducted periodically.
“It’ll mostly be narrow bodies. Every few months, you’ll have a wide body in there as well,” he said.
He clarified that this is not a fixed monthly target.
“The rates on all of our production lines have been moving up over the past couple years. So, we were at 38 a month on the 737 MAX. We moved to 42. We can move to 47 and beyond. Now, on the 787 line, we’ve already announced goals to go from 7 to 10 and beyond,” he said.
The production ramp-up would help the Air India group (Air India and Air India Express) and Akasa Air scale up their fleets.
Gupte, however, didn’t name any airline.
Recently, Air India inducted a Dreamliner (wide-body aircraft) while Air India Express inducted its first line-fit jet (customized for the company) from Boeing. Akasa is inducting two narrow-body jets.
Air India will induct a new wide-body aircraft every six weeks in 2026 and 2027, which, alongside the refurbishment of its legacy Boeing fleet, its chief executive Campbell Wilson said in October 2025.
The three Indian carriers have together placed orders for nearly 1,000 jets between the two aircraft makers—Boeing and Airbus.
Over a 20-year period, Boeing estimates that “for the Indian, South Asia region, about 3,300 aircraft” will enter the market. “That is roughly a quadrupling of the Indian fleet over that period as well. So, some of those aircraft will be for replacement. Many of those aircraft will be for growth, naturally.”
IndiGo has a fleet size of 440, as against Air India Group’s (Air India and Air India Express together) 297 and Akasa’s 32.
Gupte said Boeing has been investing in training infrastructure to support this growth in India. “We made $100 million investment in simulator capacity over the past year and a half or so,” the executive said, adding that simulators for both 737 MAX and 787 aircraft have been inducted in India.
The company is also focused on building maintenance and repair capacity domestically. “We also need significant maintenance. And so we’ve been involved with our airline customers on maintenance training capability in India,” he said. This includes encouraging the development of domestic MRO ecosystems.
“You see that (MROs) starting to come in with Safran, setting up an engine shop for the CFM LEAP engine here in Hyderabad,” he said.
However, Boeing does not have any immediate plans to have a final assembly line here in India.
The CFM International LEAP engine is a next-generation commercial aircraft jet engine, produced by CFM International, a 50:50 joint venture between America's GE Aerospace and France's Safran Aircraft Engines.
On aircraft manufacturing, Gupte downplayed the strategic importance of final assembly alone. “Final assembly is about 7% of the value chain. There’s the other 93% that many of us, ourselves, Airbus, Lockheed, have been focused on developing here in India,” he said.
Boeing’s supplier base in India now includes over 300 firms, he said. “That is a huge part of being ready to make airplanes in India,” Gupte said, adding that component manufacturing and advanced materials matter far more than assembly lines in determining long-term competitiveness.