In a landmark development for Indian aviation, the country is poised to join an elite group of nations capable of assembling large commercial passenger aircraft. The Adani Group has forged a strategic partnership with Brazilian aerospace giant Embraer to establish a Final Assembly Line (FAL) in India for Embraer's popular range of regional jets.
A Strategic Partnership Takes Flight
The collaboration was formalized last month when Adani Aerospace and Defence signed a Memorandum of Understanding (MoU) with Embraer in Brazil. This deal represents the most significant advancement for Prime Minister Narendra Modi's Make in India initiative within the aviation sector. While the Adani Group and Embraer have refrained from official comments, industry sources confirm the partnership is set to be officially announced later this month at the Hyderabad air show.
Specific details regarding the plant's location, the scale of investment, and the operational timeline remain under wraps. However, the initiative marks a pivotal step towards indigenous aircraft manufacturing. Embraer's aircraft, which are ideal for short to medium-haul routes, typically seat between 70 and 146 passengers, filling a crucial niche in the market.
Government Backing and Market Potential
The Indian government, recognizing the nation's status as the world's fastest-growing aviation market with over 1,800 planes on order by carriers like Air India, IndiGo, and Akasa, has been actively courting global aerospace leaders to set up FALs locally. With Embraer taking the pioneering step, authorities are now considering incentives to boost orders for aircraft assembled at this first major commercial FAL.
"Several things are under consideration, including fiscal incentives for those ordering from this FAL," revealed a government official. The proposed incentive structure is likely to be on a reducing scale, potentially tapering after every 50 orders, to support the initial phase of the program. The government believes that a successful Embraer FAL and the accompanying ecosystem will encourage aviation titans Airbus and Boeing to establish their own assembly lines in India, moving beyond mere component sourcing.
Fueling Regional Connectivity and New Airlines
Embraer already has a presence in India with nearly 50 aircraft across commercial, defence, and business aviation segments. In the commercial sphere, regional carrier Star Air operates Embraer jets and is a potential customer for more. The current backlog for Airbus and Boeing single-aisle aircraft, with delivery slots stretching to the middle of the next decade, is also driving interest. Several Indian aviation startups are reportedly planning to launch operations using readily available Embraer aircraft.
Industry leaders see immense potential. Raul Villaron, Embraer's Senior Vice President, has previously stated that India will require around 500 aircraft in the 80-146 seat category over the next two decades. This outlook is bolstered by India's expanding regional connectivity through new airports in tier II and III cities and the government's UDAN scheme.
Gautam Sahni, Managing Director of Subha Aviation and a veteran charter operator, is among those awaiting government clearance for an operator's permit and is in talks with Embraer. "The Indian regional aviation market is gearing up for massive growth," Sahni noted, highlighting the impact of new airports and the upcoming secondary airports in Delhi and Mumbai. He plans to base his operations at the new Noida Airport.
This move follows Embraer's indication last June about increasing sourcing from India and potentially setting up an FAL contingent on securing substantial orders. The company already operates a fully-owned Indian subsidiary to explore opportunities across defence, commercial, and business aviation sectors.
