India-US trade pact boosts Boeing's parts sourcing from India: Goyal

India-US interim trade pact removes tariffs on aircraft parts, boosting sourcing by Boeing and Airbus as India emerges as a key global OEM hub

US-based Boeing is a large buyer of aircraft parts from India and is looking at the country as its largest foreign original equipment manufacturer (OEM) base for components going forward, Commerce and Industry Minister Piyush Goyal said on Saturday.

Under an interim trade agreement with India, the US has agreed to remove tariffs on certain aircraft and aircraft parts of India.

"Already Boeing and Airbus are large buyers of aircraft parts from India...I am told both these companies are looking at India as the largest foreign OEM for parts going forward and I have had conversations with the top board and CEO of both companies. There is a lot of excitement about the India-US partnership," he told reporters here.

 

Boeing has over 265 commercial and military aircraft operating in India, which is a key market for the plane maker.

The company has more than 325 suppliers and the annual sourcing from the country is worth over $1.25 billion. The amount includes components and services.

Airbus also aims to increase its sourcing of components and services from India to $2 billion by 2030. Currently, it is around $1.4 billion.  India-US trade pact will open multifold opportunities  Aircraft maker Boeing on Saturday said the India-US interim trade agreement will open multifold opportunities and emphasised that the company has always advocated for zero-for-zero tariff approach for the aerospace and defence sector.

India and the US on Saturday announced they have reached a framework for an interim trade agreement under which both sides will reduce import duties on a number of goods to boost two-way trade.

 

Under the framework, tariffs will go down to zero on various goods, including generic pharmaceuticals and aircraft parts.

 

Boeing India and South Asia President Salil Gupte said the agreement opens multifold opportunities.

 

"This deal creates momentum to extend that principle, which would boost industrial growth, strengthen national security, and deliver win-win opportunities for both countries," he said in a statement.

 

At Boeing, he said they have always advocated a zero-for-zero tariff approach for the aerospace and defence sector because of its tremendous impact across travel, connectivity, and the global economy.

 

About the agreement, Aequs Executive Chairman and CEO Aravind Melligeri said the lifting of tariffs will lead to improved cash flows and enhanced cost competitiveness for the supply chain.