Aerospace and Defence
Overview of India
₹5,00,000 crore
(US $ 81.7 billion)
India’s estimated expenditure on Aerospace & Defence (A&D) sector over the next 10 years
₹96,829 crore
(16 billion)
Size of Indian civil aviation industry
₹5,01,338 crore
(US $ 82 billion)
Expected market opportunity in the aviation sector in 2010-20
41% increase
in passenger traffic during 2012-14
₹1300 crore
(US $195 million)
Estimated size of the MRO segment in India by 2020
highest in the world
India’s expenditure on defence
India is the largest importer of defence equipment in the world
₹2,69,743 crore
(US $ 40.4 billion)
Allocation for defence in 2015-16 budget
Destination Andhra Pradesh
in the state by 2020 (6 existing)
Greenfield aerotropolis
to come up in over 7500 acres in Visakhapatnam with a state-of-the-art MRO facility
Large naval presence
Visakhapatnam is the headquarters of the eastern naval command
Primary spaceport
for ISRO at Sriharikota
Atmospheric research laboratory
at Gadanki near Tirupati
Aerospace and defence park
planned to come up in Anantapur and Chittoor/Pottisriramulu Nellore districts
in ease of doing business
by World Bank
Excellent logistics and reliable infrastructure available
Skilled labour workforce available
Drivers of Growth
Proliferation of Low Cost Carriers (LCC)
Indian Aircraft Fleet is expected to double in volume by 2020
Need for a strong MRO industry
Currently only 5-10% of MRO work for domestic carriers is done in India
Focus on developing manufacturing clusters to attract global players to India
FDI allowance
by the Government for A&D sector
Cost advantage
Key Policy Targets
₹20,000 crore
(US $ 3 billion)
of new investments in the sector by 2020
highly skilled employment opportunities
in the sector by 2020
Key Fiscal Incentives
Basic infrastructure

100% subsidy (not exceeding ₹6 crore) on basic infrastructure developed on under developed land purchased or leased from the government

Entry tax

100% exemption on plant & machinery and capital goods for 3 years from commencement of commercial production (CoCP)


100% reimbursement on all input material (excluding aviation turbine fuel) for aircrafts brought in specifically for MRO in Andhra Pradesh

Anchor unit subsidy

₹10 crore for first 10 A&D OEM enterprises

Incentives for A&D park

Subsidy of upto 50% of the cost of land, building, and plant & machinery, subject to a maximum of ₹25 crore for testing centre, ₹30 crore for technology innovation centre, and ₹50 crore for the common facility centre

R&D investments

10% subsidy on R&D investments in defence above ₹10 crore, subject to a maximum of ₹10 crore

Patent cost & quality certification

Reimbursement of Patent Cost (75% upto max. of ₹25 lakh) and Quality Certification (50% of all charges upto max. of ₹5 lakh)

International trade fairs

Reimbursement of 50% of cost, upto a maximum of ₹5 lakh for 10 MSME A&D units per year

Skill development

For in-plant training, the cost of training would be subsidised by way of offering stipend, upto 50% of the cost of training subject to ₹10,000/month per trainee

Vittal Innovation City
Essel Infra

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