India will soon start developing small companies to augment its aircraft component manufacturing industry.

“There is a need to develop Tier II and Tier III companies in the country to manufacture small components and assemblies of aircraft,” says Ajit Singh, India’s civil aviation minister.

The Indian aerospace industry is still in a primitive stage because passenger aircraft assembly is currently handled by the public sector. But the private sector is also showing interest, as some companies have begun manufacturing aircraft parts outsourced by foreign companies, Singh says. These firms will have the potential to supply their products to foreign companies, he says.

As India emerges as one of the fastest-growing aviation markets in the world, leading aircraft makers are eyeing the country as a global sourcing base for aircraft components and software.

European Airbus and U.S.-based Boeing are sourcing components for their existing models as well as their upcoming A-380 and 787 aircraft as part of their offset obligations.

Under the Indian government’s offset policy, aerospace firms are obliged to procure materials and services in India equivalent to 30% of a contract’s value.

Airbus and Boeing have established research and development centers in Bengaluru and are relying on Indian information technology firms like Infosys, Wipro, and HCL for engineering and software requirements. Companies like HAL and Tata Industries Limited are supplying aircraft components.

Airbus says it has 28 suppliers in India.

Dr. Srinivasan Dwarkanath, Airbus vice president international cooperation for Asia-Pacific and the Middle East, recently said, “Every A380 will have 16 made-in-India evacuation slides that are made by Goodrich. Also, for every second A320 aircraft, the forward passenger doors are made in India by HAL and every single A320 we deliver will have made-in-India flap-track beams supplied by Dynamatis.”