NEWS - India UK Aerospace Trade Deal Confirmed

UK-India Trade Deal: A Tailwind for UK Aerospace as India's Aviation Sector Soars

The recently agreed UK-India trade deal marks a pivotal moment for UK aerospace manufacturers, promising to open new avenues and strengthen existing partnerships. This landmark agreement arrives at a time when India's aerospace sector is poised for significant expansion, presenting a lucrative landscape for British businesses.


The Soaring Indian Aerospace Market: Facts and Figures


India's aerospace and defense market is on a robust growth trajectory, driven by increasing defense spending, a burgeoning civil aviation sector, and the government's "Make in India" initiative aimed at self-reliance.


Current market valuations and future projections paint a compelling picture for the coming years:


  • Current Size: The Indian aerospace and defense market was valued at approximately USD 27.1 billion in 2024.


  • Forecasted Growth: This market is anticipated to reach USD 54.4 billion by 2033, demonstrating a strong Compound Annual Growth Rate (CAGR) of approximately 6.99% from 2024 to 2033. Other estimates suggest the market could grow from around USD 26.78 billion in 2023 to USD 48.41 billion by 2032, with a CAGR of roughly 6.8%. The aerospace segment within this broader market is expected to witness the highest growth.

This significant growth is fueled by an increasing demand for air travel, with India projected to become the world's third-largest air passenger market by 2024 and potentially the world's leading aviation market by 2047. The country's airlines are expected to procure a substantial number of new aircraft in the coming years, further boosting the demand for aerospace components and services.


Implications for UK Aerospace Manufacturers


The UK-India trade deal offers several key advantages for British aerospace companies looking to tap into this dynamic market:


  • Reduced Trade Barriers: The agreement aims to significantly reduce or eliminate tariffs on aerospace products, making UK exports more competitive in India. This directly translates to cost savings and increased attractiveness for Indian buyers.
  • Enhanced Market Access: With a rapidly expanding aviation sector and a strategic focus on defense modernization, India offers a vast and growing market for UK-made aircraft components, systems, maintenance, repair, and overhaul (MRO) services, and advanced aerospace technologies.
  • Fostering Collaboration and Investment: The deal is set to deepen cooperation in technology-intensive sectors, which is particularly beneficial for aerospace. This can lead to more joint ventures, technology transfer, and direct investments, aligning with India's push for indigenous manufacturing.
  • Diversified Supply Chains: For UK manufacturers, the deal provides an opportunity to diversify their supply chains and reduce reliance on other markets, enhancing resilience and offering new sourcing options for components from India.
  • Streamlined Processes: Efforts to simplify customs procedures and improve the ease of doing business will contribute to more efficient trade flows and reduced operational complexities.


The strong growth forecast for India's aerospace sector, coupled with the benefits of the new trade deal, positions UK aerospace manufacturers for a period of exciting opportunities. By leveraging this agreement, British companies can play a crucial role in India's aviation ambitions while securing significant growth for themselves in one of the world's most promising aerospace markets.


Sources:



Matthew Feehan • July 24, 2025

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