From Make in India to Maintain in India: Mantra for Indian Aviation

By Sangeeta Saxena

New Delhi. 14 August 2024. India’s journey towards self-reliance has been a cornerstone of its economic policies in recent years. The “Make in India” initiative, launched in 2014, has significantly boosted the manufacturing sector, encouraging both domestic and international companies to produce goods within India. However, as the country continues to expand its industrial capabilities, the focus is shifting from merely making in India to also maintaining in India. This transition is particularly evident in the aviation sector, where the Maintenance, Repair, and Overhaul (MRO) industry is poised to play a critical role.

The Indian aviation market is one of the fastest-growing in the world. With a rapidly expanding fleet of commercial and military aircraft, the demand for MRO services has surged. Traditionally, India relied heavily on foreign MRO services, resulting in significant outflow of foreign exchange and longer turnaround times for aircraft maintenance. Recognizing the need to develop a robust domestic MRO industry, the government has taken several initiatives to encourage investment and growth in this sector.

 The MRO Association of India is a vital force in the country’s aviation sector, dedicated to advancing the Maintenance, Repair, and Overhaul (MRO) industry. Since its inception, the association has been instrumental in advocating for policy reforms, fostering industry innovation, and positioning India as a global hub for aviation maintenance services. On the occasion of India’s 78th Independence Day, Bharat Malkani, President of the MRO Association of India, reflected on the sector’s journey from a neglected industry to a thriving powerhouse, driven by technological advancements, skilled manpower, and strategic policy changes.

MRO Association of India stands at the forefront of the aviation maintenance industry, advocating for the growth and development of India’s MRO sector. Established to represent the collective interests of MRO service providers, the association plays a pivotal role in shaping policies, fostering innovation, and promoting the capabilities of Indian companies in the global arena. As the aviation industry continues to expand, the MRO Association of India remains committed to driving excellence and self-reliance in this critical domain.

Bharat Malkani President MRO Association of India elaborated on the growth of the MRO Sector Since Independence, as the nation celebrates 78^th Independence Day  and completes 77 years of becoming free from the British rule. “Since India’s independence, the Maintenance, Repair, and Overhaul (MRO) sector has been a sector totally ignored in India. Shackled by archaic regulations that favored our colonial masters, Indian MRO industry sputtered and faltered. By the time Indian Aviation had started to grow to cater to the need of a growing middle class population India was importing almost 95% of its’ MRO requirements.  Recognizing this trend the MRO Association along with the Ministry of Civil Aviation decided that a strategic business like Aircraft MRO must be expanded significantly, driven by a combination of technological advancements, skilled manpower to achieve self-reliance. However, the most important issues needed to bring this sector to profitability was policy changes.”

The MRO Association of India was founded with a clear mission: to enhance the competitiveness of India’s MRO industry and to establish the country as a global hub for aviation maintenance services. The association envisions an industry that not only meets the domestic needs of India’s growing aviation market but also attracts international business by offering world-class services at competitive prices.

One of the core functions of the MRO Association of India is to advocate for favorable policies that support the growth of the MRO sector. The association works closely with government bodies, regulatory authorities, and industry stakeholders to address challenges such as high taxes, regulatory hurdles, and infrastructure constraints. Through continuous dialogue and engagement, the association has successfully influenced several policy changes that have eased business operations and attracted investments into the sector.

“In the early years, India’s MRO sector primarily focused on maintaining and repairing general aviation aircraft and equipment. However, with the establishment of indigenous aerospace facilities and institutions, we gradually built the expertise and infrastructure needed to support larger aircraft in use by the airlines. Today, the Indian MRO industry is recognized globally for its excellence in servicing a wide range of aircraft, from commercial airlines to military helicopters and jets. Our sector has become a crucial enabler of operational readiness for both civilian and defense aviation, contributing to the safety and efficiency of air operations across the region,” he added.

The MRO Association of India serves as a platform for collaboration and networking among industry players. It organizes conferences, workshops, and seminars that bring together experts, policymakers, and service providers to discuss the latest trends, technologies, and best practices in aviation maintenance. These events facilitate knowledge sharing, foster partnerships, and create opportunities for Indian companies to showcase their capabilities on a global stage.

“As we look towards the future, the MRO sector is poised for even greater growth, with increasing investments in technology, infrastructure, and workforce development. The government’s ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives are further strengthening our capabilities, positioning India as a global hub for aerospace maintenance and repair services. The MRO Association of India is proud to be part of this journey, working alongside industry partners and the government to continue advancing our sector. We remain committed to enhancing our national capabilities, fostering innovation, and building a self-reliant and globally competitive MRO industry that serves the needs of India and the world,” stated Bharat Malkani.

 Recognizing the importance of a skilled workforce in the MRO industry, the association places a strong emphasis on training and skill development. It collaborates with educational institutions, technical training centers, and industry experts to design and implement programs that equip technicians and engineers with the latest skills required for advanced aircraft maintenance. By nurturing a highly skilled workforce, the MRO Association of India ensures that the industry remains competitive and capable of meeting the evolving demands of the aviation sector.

 The association is a strong proponent of the “Make in India” initiative, encouraging the development of indigenous capabilities in aircraft maintenance. It supports efforts to indigenize components, tools, and technologies required for MRO activities, reducing dependency on imports and strengthening the local supply chain. By promoting domestic manufacturing and innovation, the MRO Association of India contributes to the country’s goal of achieving self-reliance in the aviation sector.

With India’s strategic location and growing aviation market, the MRO Association of India actively promotes the country as an attractive destination for international MRO business. The association participates in global aviation forums, exhibitions, and trade shows, showcasing the strengths and capabilities of Indian MRO service providers. Through these efforts, the association aims to capture a larger share of the global MRO market and position India as a preferred hub for aviation maintenance services.

The MRO Policy 2021, introduced by India’s Ministry of Civil Aviation, seeks to boost the Maintenance, Repair, and Overhaul (MRO) sector by encouraging investment and enhancing infrastructure. Key highlights include the establishment of MRO facilities at eight major airports, including Delhi, Mumbai, and Chennai, and the extension of land leases from 3-5 years to 30 years through open tenders, eliminating AAI royalties. Rental rates are now determined by bidding, with a rate escalation of 15% every three years. The policy also aims to integrate military and civil MRO activities, reduce duplication, and improve efficiency. Additionally, it emphasizes skill development by promoting training centers and offers various incentives like tax exemptions to attract investments into the sector.

Increased investment in the MRO sector was facilitated by the government’s 2015 decision to permit up to 100% foreign direct investment (FDI) in the aviation sector. Foreign maintenance repair companies were able to establish facilities in India and work with local players after FDI regulations were liberalised.  In 2016, the government lowered the 18% customs duty on maintenance, repair, and overhaul services to 5%. The industry grew as a result of the customs duty reduction, which made MRO services more accessible and incentivised more airlines to employ Indian MRO services. And recently the introduction of a uniform 5 percent IGST rate on MRO items has been a major boost for the aviation sector. Previously, the varying GST rates of 5 percent,12 percent, 18 percent and 28 percent on aircraft components created challenges, including an inverted duty structure and GST accumulation in MRO accounts.

The MRO Association of India has played a pivotal role in transforming the nation’s aviation maintenance industry. From championing policy reforms to promoting skill development and global collaboration, the association has been at the forefront of the sector’s growth. As India continues its ascent as a global aviation leader, the MRO Association of India remains committed to driving excellence, fostering innovation, and ensuring the country’s self-reliance in aviation maintenance. The association’s ongoing efforts will be crucial in shaping the future of India’s MRO sector, enabling it to compete and thrive on the world stage.

As India continues its journey from “Make in India” to “Maintain in India,” the MRO sector will be a key enabler of the country’s aviation growth. The government’s proactive policies, coupled with the industry’s commitment to excellence, are set to transform India into a global hub for MRO services. This shift will not only enhance the operational efficiency of the Indian aviation industry but also position the country as a leader in the global MRO market.

In conclusion, the transition from manufacturing to maintaining in India reflects the country’s broader ambition of self-reliance and economic resilience. By nurturing the MRO sector, India is not only securing its aviation future but also paving the way for sustained economic growth and technological advancement. The future of Indian aviation is bright, and the MRO industry is set to be one of its shining stars.