Why global aerospace OEMs are making long-term manufacturing bets on India

New Delhi, February 3, 2026. Global aerospace OEMs are no longer “testing” India – they are committing to it. In an interview with Aroonim Bhuyan of India Strategic, Preeti Vamsi, CEO and Executive Director of Raghu Vamsi Aerospace Group, explains why India has crossed the credibility threshold to become a long-term manufacturing and engineering base. 

Excerpts:

India Strategic: What has fundamentally changed in the global manufacturing landscape that is pushing OEMs to look at India now, rather than five or ten years ago?

Preeti Vamsi: Five to ten years ago, OEMs were only beginning to explore India as a potential aerospace manufacturing base. Given that aerospace is a long-gestation industry, OEMs were focused on assessing the appetite and capabilities of Indian manufacturers, and – more importantly – on verifying their ability to meet stringent aerospace quality standards and consistently sustain required processes over time. Today, however, many Indian suppliers are integral to global OEMs’ long-term programmes, rather than being evaluated merely as alternative options, as was the case earlier. This shift has been driven by suppliers’ proven ability to deliver critical components, successfully clear mandatory audits, and maintain high-quality standards consistently over the long term.

IS:  Are OEMs coming to India as a “China+1” hedge, or are some now seeing India as a primary manufacturing base?

PV: Because of the geopolitical situation, there is probably a bit of “China+1” strategy which could be augmenting the push to India. However, aerospace is fundamentally a low-volume, high-quality industry – an area in which Indian manufacturers are particularly competitive. OEMs are definitely committing long-term capacity to India (moving towards key manufacturing base) instead of viewing it only as a risk-mitigation option.

IS: When global OEMs approach Indian companies like yours, what are their top three demands: cost, scale, technology, or reliability?

PV: Reliability comes first always. Cost, scale and technology are also important but only after quality and delivery consistency are proven.

IS: How do India’s capabilities today compare with China, Vietnam or Mexico in meeting those demands?

PV: China is known for scale, Vietnam for assembly-led manufacturing, and Mexico benefits from proximity to the US. India’s strength lies in engineering depth, process adaptability, and the ability to move beyond assembly into complex manufacturing. Another significant advantage is the large pool of skilled talent; however, there is still an opportunity to improve by scaling manufacturing operations to achieve greater cost efficiency.

IS: Are OEMs looking for simple assembly in India, or for full-spectrum manufacturing including design, tooling, and testing?

PV: Earlier, OEMs involved India to start with simple work packages which posed low risk for testing execution capability. Today, that expectation has expanded. OEMs are more and more seeking out partners who can take up combined responsibility in areas related to tooling, process engineering, qualification, and testing, which is evidence of their belief in India’s ability to handle complexity as well as ensure repeatability across related processes.

IS: Which Indian advantages are proving most decisive – labour costs, engineering talent, domestic market size, or government incentives?

PV: Engineering capability is the largest driver for global OEMs. The value proposition of India as a country is it can work at a deep technical level, solve tough problems, and shift gears when processes need to change. It is this kind of problem-solving, along with execution discipline, that will help OEMs make these long-term commitments in expanding their manufacturing base in India.

IS: How deep is localisation today – are OEMs able to source most components from Indian suppliers?

PV: Localisation has improved significantly, especially in structures, machining, and sheet metal. At present, OEMs are strongly focused on localising materials in India, while acknowledging that some specialised materials and processes will continue to be sourced from abroad.

IS: What are the biggest gaps in India’s supply chain that still hold back large-scale OEM manufacturing?

PV: Tier-2 and Tier-3 supplier maturity is still uneven. Raw materials, specialised processes, and testing infrastructure also need strengthening. The required capability exists, but consistency and scale need work.

IS: How long does it realistically take to build a globally competitive supplier ecosystem in India?

PV: Creating a global centre of excellence in aerospace and defence takes eight to 10 years of continuous participation, repeat programmes, and ongoing learning. India has passed the first credibility test. Now the focus has to be on building capability, supply-chain depth, and scale across several long-cycle programmes.

IS: What will success look like for India in global manufacturing by 2035?

PV: By 2035, success for India in the global aerospace and defence industry would mean being a trusted, strategic manufacturing and engineering partner to leading global OEMs and defence primes, with Indian companies embedded across long-term civil and military programmes rather than positioned as alternate suppliers. India would be recognised for delivering complex, safety- and mission-critical systems and components, supported by localised materials, special processes, MRO, and a resilient tier-2 and tier-3 ecosystem. Competitiveness would come from world-class quality, certification maturity, security compliance, and cost efficiency achieved through scale and automation, not labour arbitrage. Crucially, Indian firms would participate in co-development, design-to-build, and lifecycle sustainment, making ‘Made in India’ synonymous with reliability, sovereignty, and long-term program resilience in global aerospace and defence.