Boeing unfazed by India-EU FTA, says maintenance cost unlikely to decline soon

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 will bring only limited gains to European spare parts suppliers.

Therefore, American aircraft manufacturer Boeing does not expect the recently signed India-EU Free Trade Agreement to significantly affect its maintenance and repair operations in India, although it may reduce the costs of its European rival Airbus somewhat.

Salil Gupte, President, Boeing India and South Asia, said: “The reality is that most parts come for MRO and repair maintenance purposes and customs duties have already been capped at 5% by the government. So I am not sure if this reduction is significant from an MRO perspective.” Mint In an interview at Wings India 2026 in Hyderabad.

He was responding to a question on whether lower taxes on European manufacturers could give Airbus a cost advantage in India.

“Where it might be important is for Airbus’ C295 final assembly line or something like that. 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) at Vadodara, which opened in October 2024, is a dedicated facility for military and defense production and not for commercial aviation. Operated by Tata Advanced Systems Ltd (TASL) and Airbus, this facility is assembling 40 C295 tactical transport aircraft to replace the Indian Air Force’s (IAF) legacy Avro fleet, and the first “Made in India” unit is planned to be installed in 2026.

“There is no impact on aircraft and parts procurement prices. Zero tariffs for line items,” said Jürgen Westermeier, President and Managing Director of Airbus India and South Asia.

Under the FTA, import duties on civil aircraft and related parts, currently at 11% in some categories, are expected to be gradually reduced over the next few years. This, in theory, could potentially strengthen Airbus’ pricing position in India by lowering the purchasing costs of European-made aircraft and components.

Airbus currently dominates India’s narrow-body commercial aircraft market. IndiGo, the country’s largest airline, has an all-Airbus fleet.

Airbus delivered 55 jets to IndiGo, its largest customer worldwide, in 2025. In comparison, other Indian carriers had taken delivery of 19 Boeing aircraft in 2025.

Boeing expects to maintain a steady pace of deliveries to Indian airlines “over the next few years,” Gupte said.

Boeing has already increased production at its US facilities; Production of narrow-body aircraft has increased from 38 to 42 per month and will soon increase to 47. Production of wide-body aircraft will also be increased to 10 per month from the current seven, in a move expected to speed up aircraft deliveries.

“On average you can expect about two aircraft to arrive per month over the next few years. In some months the number will be more, in some months it will be less and in some months a wide-body aircraft will also be there,” Gupte said.

Short-term deliveries to Indian airlines will largely consist of narrow-body aircraft, although wide-body aircraft will also be introduced periodically.

“There will be mostly narrow bodies. Every few months there will be a wide body as well,” he said.

He explained that this is not a fixed monthly target.

“Rates on all our production lines have been increasing over the last few years. So on the 737 MAX, we were at 38 per month. We’ve moved to 42. We can go to 47 and beyond. Now on the 787 line, we’ve already announced our goals to go from 7 to 10 per month and beyond,” he said.

The increase in production will help the Air India group (Air India and Air India Express) and Akasa Air expand their fleets.

However, Gupte did not name any airline.

Recently, Air India launched a Dreamliner (wide-body aircraft) while Air India Express launched its first line-type jet (customized for the company) from Boeing. Akasa is commissioning two narrow-body jets.

Air India will introduce a new wide-body aircraft every six weeks in 2026 and 2027, in addition to renewing its legacy Boeing fleet, Air India CEO Campbell Wilson said in October 2025.

Three Indian carriers have placed orders for around 1,000 jets between two aircraft manufacturers, Boeing and Airbus.

Boeing estimates that “approximately 3,300 aircraft for the India, South Asia region” will enter the market over a 20-year period. “This means that the Indian fleet will roughly quadruple in the same period. So, some of these aircraft will be replaced. Most of these aircraft will naturally be for growth purposes.”

IndiGo’s fleet size is 440 as against Air India Group’s (Air India and Air India Express together) 297 and Akasa’s 32.

Gupte said Boeing is investing in education infrastructure to support this growth in India. “We have invested $100 million in simulator capacity in the last year and a half,” the executive said, adding that simulators for both 737 MAX and 787 aircraft have been commissioned in India.

The company is also focusing on building maintenance and repair capacity domestically. “We also need significant maintenance. That’s why we’ve been in discussions with our airline customers about maintenance training capacity in India,” he said. This includes encouraging the development of indigenous MRO ecosystems.

“You can see that they (MROs) along with Safran are starting to set up an engine workshop for the CFM LEAP engine in Hyderabad,” he said.

However, Boeing has no immediate plans to set up a final assembly line 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.

Gupte downplayed the strategic importance of final assembly alone in aircraft manufacturing. “Final assembly accounts for about 7% of the value chain. The remaining 93% is what most of us, Airbus and Lockheed, are focused on developing here in India,” he said.

He said Boeing’s supplier base in India currently includes over 300 companies. “This is a big part of being ready to make aircraft in India,” Gupte said, adding that component manufacturing and advanced materials are much more important than assembly lines in determining long-term competitiveness.