Analysis of civil aviation and aerospace markets in India
The relevance of research
The aviation and aerospace industry plays an important role in the Indian economy. Its development, as one of the most knowledge-intensive and innovative sectors of the economy, can have a significant impact on the pace of development of the scientific potential of the country as a whole.
Purpose of the study
Analysis of the state of the civil aviation market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the civil aviation market
Content
Part 1. General characteristics of the civil aviation and aerospace markets in India
1.1. Main characteristics of the market
1.2. Assessment of factors affecting the market
1.3. Indian production volume
1.4. Share of exports in production
1.5. Market share of imports
1.6. Dynamics of the volume of the civil aviation market in 2016-2018 Potential market capacity
1.7. Dynamics of the volume of the civil aerospace market in 2016-2018 Potential market capacity
1.8. Main market trends
1.9. Market structure by product type (aircraft, helicopters; related parts and aerospace components/equipment)
1.10. The strategic importance of the industry for the economic development of India
Part 2. General characteristics of Indian airport complexes and aerospace facilities
Part 3. Analysis of trade relations with foreign countries
3.1. Analysis of imports to India
3.1.1. Dynamics of imports (HS codes 8802, 8803), 2016-2018
3.1.2. Overview of current import quotas (quotas of supplying countries)
3.1.3. Structure of imports (HS codes 8802, 8803), 2018
3.1.3.1. by producing countries (in physical and value terms)
3.1.3.2. by manufacturing companies (in physical and value terms)
3.1.3.3. by recipient companies (in physical and value terms)
3.1.3.4. by types of products (in physical and value terms)
3.1.4. Determination of the position of imports from Italy and the corresponding quotas in the Indian market (HS codes 8802, 8803)
3.2. Analysis of exports from India
3.2.1. Export dynamics (TN VED codes 8802, 8803), 2016-2018
3.2.2 Export structure (HS codes 8802, 8803), 2018
3.2.2.1. by recipient countries (in kind and value terms)
3.2.2.2. by manufacturing companies (in physical and value terms)
3.2.2.3. by recipient companies (in physical and value terms)
3.2.2.4. by types of products (in physical and value terms)
Part 4: Certification, Customs and Import Laws in India
Part 5. General Analysis of Aviation Sector Clusters in India
Part 6. Investment in the sector and government programs
Part 7. Prospects for the development of the sector until 2024
Part 8. Database: associations, main producers and importers of the industry
Part 9. Recommendations and conclusions
Research excerpt
Part 1. General characteristics of the civil aviation and aerospace markets in India
1.1 Main characteristics of the market
The aviation and aerospace industry plays an important role in the Indian economy. Its development, as one of the most knowledge-intensive and innovative sectors of the economy, can have a significant impact on the pace of development of the scientific potential of the country as a whole.
The industry includes such independent areas as the development, production, repair, maintenance and operation of aircraft.
The aviation and aerospace industry market has the following main characteristics:
Indian aviation and astronautics is practically under the direct control of the state, which is both its main customer and investor.
...
The chosen and officially announced goals, albeit with a delay, are being steadily realized. A prime example of this is working on a project…
The industry is characterized by dependence on state support, which has recently become increasingly evident.
The industry is distinguished by the slow development of its own modern technologies and, at the same time, is limited in access to advanced world technologies.
In the industry, there is a lack of growth in demand for its products in foreign markets.
Currently, large industry projects are not profitable: it is a well-known fact that UAC consistently generates losses.
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India is a weak player in the global civil aviation market, but it should be noted that the increased interest of the state in the development of an export channel for the sale of aircraft and aerospace products became apparent only in 2016, and not enough time has passed to talk about serious results. In addition, the world market is difficult to enter and overcoming the existing barriers requires to a large extent the diplomatic efforts of the state.
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Under these conditions, Indian industry experts conclude that the final result of the planned efforts to develop exports will depend to a very large extent on the nature and volume of the support that the state is ready to provide.
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Thus, as with other Indian non-commodity sectors, the most urgent urgent tasks of the aviation and aerospace industry are import substitution and increasing the competitiveness of Indian products in the world market. However, the solution of these issues largely depends on the efforts of the state and its ability to provide support to the industry.
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1.2. Assessment of factors affecting the market
The main factors influencing the civil aviation and aerospace market in India and shaping the development trends of the industry are socio-demographic, technological, economic and political groups of factors.
Social (demographic) factors
Let us consider the influence of social (demographic) factors on the situation.
technological
Let us briefly consider the influence of technological factors on the situation in the aviation industry.
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But it can be noted:
- technological lag behind the world's leading manufacturers;
- high dependence on imported components;
- an extremely limited range of products manufactured today;
- chronic inability to meet the stated deadlines for the implementation of projects and some other points.
Economic
Consider the influence of economic factors on the situation.
GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced per year in all sectors of the economy on the territory of the state for consumption, export and accumulation, regardless of the nationality of the factors of production used.
GDP is the main, most complete official indicator of social welfare. The absolute and relative values of GDP give an idea of the general material well-being of the nation and the dynamics of its growth / decrease, since the higher the level of production, the higher the welfare of the country.
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The Government of India has planned to implement a set of measures aimed at ensuring the achievement of national goals, which will lead to significant shifts in the structure of production and ensure the growth of GDP.
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The exchange rate is a significant factor for the Indian market, as a significant share of imported equipment and equipment is purchased for the industry.
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The decrease in the availability and increase in the cost of credit resources affects both in the short term - to ensure current activities, and in the long term - in terms of ensuring investment activities with a long maturity (reconstruction and technical re-equipment of production).
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The low level of effective demand of the population…
Restriction of the state's capabilities ...
Possibility of further development of the leasing sales scheme…
In the future - a more complete use of the possibilities of import substitution ...
In the future, the development of an export sales channel for products ...
...
Political and legal factors have a significant impact on the situation in the industry, both positive - in the form of state support and development programs, and negative, due to the situation with sanctions and the restriction of India's access to markets, resources and investments.
Table 2. STEP analysis of factors affecting the Indian aerospace market
1.3. Indian production volume
Consider the volume and dynamics of the Indian production of aircraft of various nomenclature; official statistics take into account production volumes in pieces.
Chart 4 covers the period of production of Indian aircraft from 2013, to show the dynamics of production before the restriction of the supply of imported components (the process was initiated in 2014); reflects the following: ...
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Consider the results of the work of the civil aircraft industry in India in 2018.
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If we consider the results of the activities of specific enterprises in 2018, we can note:
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Most of all civilian aircraft were newly built at this aircraft factory - these are aircraft of the brand ...
It can also be noted that now there are 136 aircraft in permanent commercial operation ... , most of which are used for the commercial transportation of passengers.
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This company designs, tests, manufactures, advertises, sells, repairs passenger and military aircraft.
...
As for the production of helicopters, official statistics show ...
Diagram 5. Production of helicopters, 2013 - 2018
Thus, the volume of Indian aircraft production is extremely …
1.4. Share of exports in production
An analysis of export operations with aircraft equipment has formed the following picture of the current situation in the industry ... . Consider the situation in Diagram 6.
...
For comparison, let's look at the structure of the distribution of Indian aircraft production in 2016 in Diagram 7.
In total, in India in 2016, ... aircraft of various nomenclature were produced. Helicopters and aircraft were sent for export ... than was purchased in India.
Let's form a summary table of data on the distribution of Indian aircraft production volumes.
...
1.5. Market share of imports
Consider the share of imported aircraft in the Indian market. For the convenience of analysis, we will group data on the types and sources of aircraft entering the Indian market during 2018.
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Let us consider in what shares the aircrafts are in demand by the Indian market according to the situation in 2018 in Diagram 8.
As can be seen from the market structure, the most demanded type of aircraft is the passenger aircraft…
1.6. Dynamics of the volume of the civil aviation market in 2016-2018 Potential market capacity
Based on official statistics, we will form a picture that reflects the dynamics of the volume of the civil aviation market in India for the analyzed period.
Diagram 9. The volume of the Indian aviation market, pieces, 2016-2018
Thus, the dynamics of the aviation market for the period 2016-2018
...
Even at the end of the 80s of the last century, in the USSR, the annual need reached 300 aircraft, respectively, taking into account a combination of factors and available statistics, ...
1.7. Dynamics of the volume of the civil aerospace market in 2016-2018 Potential market capacity
The main indicator characterizing the development of the aerospace market in India and available in the public domain is the number of space launches per year. Consider the available statistics.
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Thus, in 2016, … launches, …
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In 2017, … launches, …
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In 2018, … launches, …
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Recently, the achievements of space activities are increasingly being used in everyday life: the Internet, cellular communications, car navigators, cartography (Google, Yandex maps), and the scale of the use of so-called ""space products"" in our daily life is growing at a tremendous pace.
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A special place among Indian space services is occupied by the prospect of developing space tourism - flights paid by private clients into space or low Earth orbit for recreational or scientific purposes.
Recently, India has shown an increased interest in using the results of space research in non-space sectors of the economy. In addition, the world market of non-space goods and services is constantly expanding the range of science-intensive and high-tech products, which are the accompanying achievements of space programs.
1.8. Main market trends
The main trend that determines the prospects for the development of the market is …
Another trend in the modern air transportation market, which, in turn, affects the aviation market - the majority of passenger traffic is carried on regular flights, there is a clear tendency to redistribute passenger traffic in favor of regular flights.
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Against the backdrop of emerging market trends in air travel, the Indian aircraft market is also gaining new features: against the backdrop of the growth in the attractiveness of air travel, competition is getting tougher, but due to limited funds and an emphasis on cheap fares, the fleet is being optimized in terms of price level and minimizing the degree of comfort.
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1.9. Market structure by product type (aircraft, helicopters; related parts and aerospace components/equipment)
Based on the above material, we will form the structure of the aircraft and aircraft parts market in India, calculate the market shares from volumes in monetary terms, in Diagram 10.
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1.10. The strategic importance of the industry for the economic development of India
The modern Indian aerospace industry is one of the most promising areas for the development of the Indian economy in the coming decades. The production and scientific and technical potential accumulated in the industry over many decades of its existence, in many respects, especially in the military sector of the aircraft industry, still significantly exceeds the achievements of the leading industrialized countries. The Indian aviation industry continues to have a presence in world markets, especially in the international military aviation market. The successful promotion of Indian aviation technology is associated with tough competition with world leaders united in large diversified aerospace corporations.
In addition, in order to preserve sovereignty, develop the economy, including the employment of the population in highly intellectual labor, and the social sphere of India with its vast territory, guaranteed independence of technologies for aircraft construction, the development of aerospace communications and the maintenance of their infrastructure, etc. will always be necessary.
The enterprises of the complex have high technologies, often unparalleled in the world. For the production of missiles and aviation, the industry is working on constant updating and expanding the list of composite materials used, the creation of information systems, etc., which requires the participation of highly qualified personnel.
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The use of space systems for solving problems in such areas as communications, television and radio broadcasting, remote sensing of the Earth from space, navigation and cartography makes a significant contribution to the formation of an economy based on the use of information technologies. The expansion of the space technology market, the use of the results of space activities in environmental monitoring, disaster management and other areas of human activity are designed to improve the quality of life of the Indian population.
The use of the results of space activities also makes it possible to increase the efficiency of the implementation of priority national projects.
Relying on its space potential, India seeks to stabilize the economy, provide a qualitatively new level of defense and international cooperation tasks, and strengthen its positions in the world community. One of the promising areas of interaction between countries in space is military-technical cooperation (MTC) in ensuring global international security in all its aspects, and hence in ensuring political stability in vast territories, up to entire continents.
Thus, aviation and astronautics are the locomotives for the development and implementation of new technologies in India, the key to the development of the country and the bulwark of its security and integrity.
Part 2. General characteristics of Indian airport complexes and aerospace facilities
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Currently, India is planning to develop aerospace facilities on its territory to reduce the risks and dependence on other countries in terms of launches.
Part 3. Analysis of trade relations with foreign countries
3.1. Analysis of imports to India
3.1.1. Dynamics of imports (HS codes 8802, 8803), 2016-2018
Let's consider the volume and dynamics of aircraft imports (TN VED code 8802) to India over the past three years, based on official customs statistics.
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Thus, Indian airlines continue to upgrade their fleet by purchasing imported aircraft. At the same time, the focus on imports is caused, among other things, by fierce competition in the air transportation market: in an effort to reduce costs, carriers massively get rid of old aircraft, which are characterized by low efficiency (high fuel consumption) and require large funds for technical support.
Despite the fact that earlier, in the USSR, aircraft had good flight performance, but the equipment had significant flaws in terms of ensuring the efficiency of its operation (first of all, this is the consumption of fuel and lubricants). Until now, India has big problems with the production of reliable and economical aircraft engines.
Consider the volume and dynamics of imports of aircraft parts (TN VED code 8803) to India over the past three years, based on official customs statistics, in Diagram 12.
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3.1.2. Overview of current import quotas (quotas of supplying countries)
Import quota - non-tariff quantitative (value or natural) ways to restrict the import of certain goods into the country. And also - an economic indicator that characterizes the importance of imports for the national economy as a whole and for individual industries and industries, for various types of products.
Import quotas are one of the most important tools for protecting Indian producers from competitors and protecting the domestic market from a decrease in the consumption of domestic goods. With quotas, the state issues licenses for the import and export of a limited number of goods, while prohibiting unlicensed trade.
The state introduced the following types of quotas for goods:
global (without specifying specific countries);
group (for certain groups of countries);
individual (indicating a specific state).
At present, there are no effective quotas for restricting the import of aircraft and their parts into India. … Moreover, there are currently certain benefits for imported foreign-made equipment, including used ones.
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According to the current Indian legislation, civil passenger aircraft are divided into 7 groups, some of which are completely or temporarily exempt from import taxes, others are subject to customs duty, customs duty and VAT.
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3.1.3. Structure of imports (HS codes 8802, 8803), 2018
3.1.3.1. by producing countries (in physical and value terms)
Let's analyze the structure of imports to India of goods according to TN VED codes:
Code 8802 Other aircraft (eg helicopters, airplanes); spacecraft (including satellites) and suborbital and space launch vehicles
Code 8803 Parts of aircraft of heading 8801* or 8802.
(* - 8801 - Balloons and airships; gliders, hang gliders and other non-powered aircraft).
Let us consider the structure of goods imported to India under the TN VED code 8802 (aircraft) by origin, for this we will group the volumes of imported products by producing countries.
Table 11. Import of goods TN VED code 8802 (aircraft) by producing countries, 2018
An analysis of the description of imported goods according to the ""Customs Declaration"" forms shows that the import of Indian-made aircraft is mainly due to the need for repair, disposal or return.
To assess the share of producing countries in the volume of imports in physical terms, consider the structure of imports in Diagram 13.
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To assess the share of producing countries in the volume of imports in monetary terms, consider the structure of imports in Diagram 14.
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For comparison, we propose to consider the main importing countries through which products of the TN VED code 8802 (aircraft) are imported to India. …
Let us consider the structure of goods imported to India under the TN VED code 8803 (parts of aircraft) by origin, for this we group the volumes of imported products by producing countries.
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The table reflects the entire list of countries - manufacturers of aircraft parts imported to India. The volume of imports of goods manufactured in India is the import of parts from used aircraft.
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To assess the share of manufacturing countries in the volume of imports of parts of aircraft (TN VED code 8803) in monetary terms, consider the structure of imports in Diagram 16.
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In addition, we propose to consider the main importing countries through which products of the TN VED code 8803 (aircraft parts) are imported to India
Based on the statistics given above, the leader among manufacturers of imported aircraft parts, TN VED code 8803 is ...
3.1.3.2. by manufacturing companies (in physical and value terms)
Let us consider the structure of goods imported to India under the TN VED code 8802 (aircraft) by manufacturing companies; for this, we will group the volumes of imported products.
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Diagram 17 clearly shows that with a significant advantage, the first place among manufacturing companies in terms of the volume of imported goods - ""aircraft"" - TN VED code 8802 (in physical terms) is occupied by the company ...
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Next, we will consider the structure of parts of aircraft imported to India under the TN VED code 8803 by manufacturing companies, for this we will group the volumes of imported products.
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To estimate the share of manufacturing companies from the volume of imports of aircraft parts in physical terms, let's consider the structure of imports in Diagram 19 (excluding parts of Indian production).
Diagram 19. Shares of manufacturing companies in the volume of imported goods (TN VED code 8803, aircraft parts), in kind, 2018
Diagram 19 shows that the first place among manufacturing companies in terms of volumes of imported goods of the TN VED code 8803 “aircraft parts” (in physical terms) is occupied by the company ...
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An analysis of the import of the goods “aircraft parts” shows that their supply is carried out mainly from the importing countries of the aircraft themselves.
3.1.3.3. by recipient companies (in physical and value terms)
Let us consider the structure of goods imported to India under the TN VED code 8802 (aircraft) by recipient companies, for this we will group the volumes of imported products; the table shows the first 30 buyers, in descending order of import volumes in physical terms.
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Let us briefly consider the scope of the top five. …
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It should be noted that significant volumes of imports are accumulated by both companies specializing in the repair of Indian aircraft and airlines that purchase spare parts for the repair needs of their own aircraft fleet. Those. in India, the service divisions of airlines are not always separated into independent legal entities, but may also be part of the airline.
3.1.3.4. by types of products (in physical and value terms)
Consider the structure of aircraft imports (TN VED code 8802) by type of product. In general, it should be noted that the volume of imports of aircraft is much ... volumes of imports of helicopters, which is due both to the more significant weight and price of aircraft compared to helicopters, and to the fact that the production of helicopters in India has been preserved.
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Let's consider the pricing policy of aircraft imported under the TN VED code 8802 as a whole, calculate the share of equipment of each price category in Diagram 27.
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Diagram 27 shows that the import volume is dominated by goods at an average price of …
3.1.4. Determination of the position of imports from Italy and the corresponding quotas in the Indian market (HS codes 8802, 8803)
Previously (clause 3.1.2), the situation with the absence of quotas for the import of aircraft and their parts was considered. Consider the volume and structure of imports of goods from Italy (both production and sale).
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Table 20 presents goods, both made in Italy - items 1-10, and goods sold from the territory of Italy - items. 11-21.
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3.2. Analysis of exports from India
3.2.1. Export dynamics (TN VED codes 8802, 8803), 2016-2018
Consider the volume and dynamics of aircraft exports (TN VED code 8802) from India over the past three years, based on official customs statistics in Diagram 29.
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Let's consider the volume and dynamics of exports of aircraft parts (TN VED code 8803) from India, based on customs statistics, as well as analysts' estimates.
3.2.2. Export structure (TN VED codes 8802, 8803), 2018
3.2.2.1. by recipient countries (in kind and value terms)
Let's analyze the structure of exports from India of goods according to TN VED codes:
Code 8802 Other aircraft (eg helicopters, airplanes); spacecraft (including satellites) and suborbital and space launch vehicles
Code 8803 Parts of aircraft of heading 8801* or 8802.
(* - 8801 - Balloons and airships; gliders, hang gliders and other non-powered aircraft).
Let us consider the structure of exports from India of goods of the TN VED code 8802 (aircraft) by countries - recipients, for this we will group the volumes of exported products.
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To assess the share of recipient countries in export volumes in physical terms, consider the structure of exports in Diagram 31.
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In first place in terms of aircraft exports (TN VED code 8802) in physical terms …
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Let's consider the shares of countries - recipients of aircraft (TN VED code 8802) in export volumes in monetary terms in Diagram 32.
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Let us consider the structure of exports from India of goods of the TN VED code 8803 (aircraft parts) by recipient countries. To assess the share of recipient countries in the volume of exports in physical terms, consider the structure of exports in Diagram 33.
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Consider the shares of countries that are recipients of aircraft parts (TN VED code 8803) in export volumes in monetary terms in Diagram 34.
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3.2.2.2. by manufacturing companies (in physical and value terms)
Before proceeding to the analysis of export volumes by manufacturing companies, let us consider the countries of origin of aircraft exported by India.
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Let us group the export volumes of aircraft (TN VED code 8802) by manufacturing companies, the data is displayed in Table 23.
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The list of companies producing exported products includes both recognized world leaders and Indian manufacturers. Let's calculate the share of exports from the volume in physical terms, the data is formed in Diagram 35.
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If we consider only Indian manufacturers, then their share in the volume of exports of goods produced in India is shown in Diagram 36:
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Let us calculate the shares of manufacturing companies in the volume of aircraft exports (TN VED code 8802) of the volume in monetary terms, the data is formed in Diagram 37.
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Next, consider the shares of manufacturing companies in the volume of exports of aircraft parts (TN VED code 8803) from volumes in physical terms in Diagram 38.
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3.2.2.3. by recipient companies (in physical and value terms)
To analyze the structure of exports, we will group the volumes of exports of aircraft (TN VED code 8802) by manufacturing companies. Table 24 shows data on the first thirty buyers, sorted by amount.
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To calculate the share of companies - buyers in the total volume of aircraft exports (TN VED code 8802) in physical terms, we will form Diagram 40.
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Consider the share of buyers in the volume of aircraft exports (TN VED code 8802) in monetary terms in Diagram 41.
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In the first place in terms of the volume of receipt from India, in monetary terms, of goods of the TN VED code 8802 (aircraft) is the company ...
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3.2.2.4. by types of products (in physical and value terms)
Let us consider the structure of aircraft exports (TN VED code 8802) by type of product.
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Part 4: Certification, Customs and Import Laws in India
Consider the location of the current TN VED codes in the Classifier:
— Classifier TN VED
— SECTION XVII. Land vehicles, aircraft, watercraft and transport-related devices and equipment
— Group 88 — Aircraft, spacecraft and parts thereof
- TN VED 8802 - Other aircraft (for example, helicopters, airplanes); spacecraft (including satellites) and suborbital and space launch vehicles
- TN VED 8803 - Parts of aircraft of heading 8801 or 8802
Explanations to the heading TN VED 8802. This heading includes:
(1) Aircraft heavier than air equipped with a power plant. This category includes airplanes (aerodrome-based, seaplanes, amphibious aircraft), autogyros (equipped with one or more main rotors freely rotating about vertical axes) and helicopters (equipped with one or more main rotors driven by an engine).
Such aircraft may be used for military purposes, transportation of people or goods, or for training, aerial photography, agricultural work, rescue, firefighting, meteorological or other scientific purposes.
This heading includes aircraft controlled by radio from the ground or from another aircraft, as well as apparatus of special design for use as land vehicles.
(2) Spacecraft which are vehicles capable of flying outside the earth's atmosphere (for example, communications satellites or meteorological satellites).
(3) Space launch vehicles designed to launch payloads into near-Earth orbits (""satellite launch vehicles"") or into interplanetary trajectories (""space vehicle launch vehicles""). Such launch vehicles at the end of active flight give the payload a final velocity of more than 7000 m/s.
(4) Suborbital launch vehicles travel on parabolic trajectories and typically carry equipment for scientific and other technical purposes outside the Earth's atmosphere, whether the payload is reentrant or not.
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Parts of this heading include:
(I) Parts of balloons and airships, such as:
(1) gondolas;
(2) skins and parts thereof (strips or panels);
(3) carrying hoops;
(4) balloonets;
(5) rigid frames and their sections;
(6) stabilizers and rudders;
(7) airship propellers.
(II) Aircraft parts, including gliders and kites, for example:
(1) fuselages and hulls; sections of fuselages or hulls; their internal or external parts (radar radomes, tail cones, radomes, panels, bulkheads, luggage compartments, floors, dashboards, frames, doors, emergency chutes, windows, hatches, etc.);
(2) wings and their parts (spars, ribs, transverse strength members);
(3) movable or fixed control surfaces (ailerons, slats, spoilers, flaps, elevators, rudders, stabilizers, servos, etc.);
(4) nacelles, hoods, engine nacelles and horns;
(5) landing gear (including brakes and their components) and retracting mechanisms; wheels (with or without tires); landing skis;
(6) seaplane floats;
(7) propellers for helicopters and gyroplanes; blades for propellers and main rotors, mechanisms for regulating the pitch of the propeller and main rotor blades;
(8) control levers (steering columns, steering wheel levers and various other control levers);
(9) fuel tanks, including auxiliary fuel tanks.
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Customs duty relief
According to the Decision of the Commission of the Customs Union of November 27.11.2009, 130 No. 14.06.2018 (as amended on June 63, N ), the following are exempt from import customs duties:
civil passage. aircraft of subheadings 8802 40 003 5 (7,5%) and 8802 40 003 6 (14,6%) (weight from 20 to 90 tons, passenger seats from 50 to 300), imported before 31 December 2023.
aircraft imported under the above exemption and imported after repair or maintenance outside the Union;
aircraft engines, spare parts and equipment necessary for the repair and maintenance of civil passenger aircraft and aircraft engines
Temporary importation
Full exemption from import customs duties and VAT in respect of: ...
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In addition to customs duties, customs payments include (clause 1 of article 70 of the Customs Code of the Customs Union, clause 1 of article 70 of the Customs Code of the Customs Union, and also clause 1 of article 318 of the Customs Code of India):
1. value added tax (VAT) levied on the importation of goods into the customs territory of the customs union;
2. excise tax (excises) levied (levied) when goods are imported into the customs territory of the Customs Union (goods of codes 8802 and 8803 are not excisable);
3. customs fees.
VAT
The import of aircraft engines, spare parts and components, prototypes, which are necessary for testing civil aircraft, will be exempt from VAT.
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Customs duty on imports in 2019
Customs duty on imports in 2019 is paid at the rates set by the Government of India. The maximum amount of customs fees cannot exceed Rs 100.
Import customs duty is a mandatory payment that is collected for the provision of customs control and clearance services. The payment is paid to the accounts of the customs service, to which goods arrive for customs clearance.
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When performing customs operations in relation to air, sea, river mixed (river - sea) navigation of ships imported into India and exported from India as goods in accordance with customs procedures for temporary import (admission), temporary export, processing in the customs territory and processing outside the customs territory (if the processing operation is the repair of such vessels), as well as upon completion of the customs procedures for temporary import (admission) by placing under the customs procedure of re-export, temporary export by placing under the customs procedure of re-import, processing in the customs territory by placing processed products under the customs procedure re-export, processing outside the customs territory by placing processed products under the customs procedure for re-import or placing processed products under the customs procedure for release for domestic consumption, customs fees for customs operations are paid in the amount of 10 thousand rupees per ship.
Features of the customs value
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Spare parts for maintenance and repair of temporarily imported aircraft
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Certification
Air Code of India No. 19.03.1997-FZ dated March 60, 03.08.2018 (as amended on August 14.08.2018, ) (as amended and supplemented, effective from August , ).
Article 37. Certification of civil aircraft, aircraft engines and propellers, unmanned aircraft systems and (or) their elements.
9. Civil aircraft, aircraft engines and propellers, unmanned aerial systems and (or) their components, including unmanned civil aircraft with a maximum take-off weight of more than 30 kilograms, manufactured in a foreign country and coming to India for operation, undergo certification in accordance with federal aviation regulations (Order of the Ministry of Transport of India dated February 20.02.2003, 19 No. ).
(in the edition of the Federal Law from 03.07.2016 N 291-FZ)
Types of certification:
- Type certification
- Certification of aircraft for airworthiness
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Aircraft certification for airworthiness
If there is a type certificate for a separate unit of the aircraft, a certificate of airworthiness is issued. Responsibility for its availability rests with the owner of the air transport.
According to the certification procedure
An application for certification work is submitted to the Federal Air Transport Agency, which considers it and sends it to the Indian Air Registry for preparation, together with the designated accredited Certification Centers, of a comprehensive conclusion for the Federal Air Transport Agency. The conclusion is the basis for the issuance by the Federal Air Transport Agency of documents confirming the compliance of the certification object with the established standards.
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Part 5. General Analysis of Aviation Sector Clusters in India
Merging the organizations of the “…” corporation into clusters was the first step in the implementation of the new development strategy of “…” until 2025. Clusters have become a new form of effective management that resolves issues of interaction between holdings.
To date, the State Corporation “…” has created 3 industrial clusters:
Aviation
Radio electronics
weaponry
Let us consider the structure of the cluster of enterprises in the civil segment of the Indian aviation sector and briefly provide information about their products.
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Part 6. Investment in the sector and government programs
As noted above, the activities of enterprises in the aviation and aerospace industry in India are supervised by the state, while there are state financing programs for the industry. Consider the available official statistics.
Table 31. Actual budget expenditures under the state program of India ""Development of the aviation industry for 2013-2025"", billion Rs.
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The planned financing of the state aviation development program for the next three years does not predict a fundamental change in the volume of financing:
2019 - … billion Rs.,
2020 - … billion Rs.
2021 - … billion Rs.
Consider the state programs currently in place to support and develop industries in India. Currently, 43 state programs are being implemented, some of which are directly or indirectly related to the aviation and aerospace industry.
The profile state program - ""Development of the aviation industry for 2013-2025"" - characterizes the Indian aircraft industry and assesses its role in the country's economic complex, contains information about the goals and subprograms formed for detailed implementation.
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The export development strategy was developed in accordance with the master plan of the priority project ""International cooperation and export in industry"". The goal of the Strategy is to ensure sustainable growth in exports of civil products of the aviation industry, both finished aircraft and equipment (to maintain the airworthiness of the existing fleet).
...
Thus, due to the lack of public funding, the industry is faced with the task of more actively earning funds for its development. But this situation is reminiscent of a ""vicious circle"" - products are not competitive enough on the international market, investments are required to refine and improve them. But the industry itself must earn these funds on the same export. Most likely, this task, if feasible, will be delayed for a sufficiently long period.
Part 7. Prospects for the development of the sector until 2024
As follows from the forecasts of leading research companies, the global market for passenger air transportation by 2024 will …
The Indian market lives in the trend of global trends, but has its own characteristics, due to a long break in the development of the industry and, as a result, the accumulated backlog. India today does not have a single model of mass-produced civil passenger aircraft, to which Customers would not have claims.
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As for cosmonautics, the situation in this segment is much better due to the fact that the industry has not interrupted its development, the competences are currently not lower than the level of world leaders.
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Part 8. Database: associations, main producers and importers of the industry
See Appendix 1
Part 9. Recommendations and conclusions
The analysis of the situation in the aviation and aerospace industry allows us to draw the following conclusions:
The aviation and aerospace industry plays an important role in the Indian economy. Its development, as one of the most knowledge-intensive and innovative sectors of the economy, can have a significant positive impact on the pace of development of the scientific potential of the country as a whole.
Since 2006, the state has been successfully implementing a program of consolidation, the United Aircraft Corporation (UAC), the Indian Helicopters Corporation, and the United Engine Corporation have been formed.
New projects in the Indian aviation industry are almost isolated cases.
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Analysts believe that the narrow-body aircraft market segment was not the easiest for such a “startup”. Sukhoi Civil Aircraft (SCAC) managed to break into the regional aircraft market, but failed to occupy a large niche in it.
Diagrams
Diagram 1. Population change in India, 2010-2018
Diagram 2. Dynamics of GDP growth in India, 2012 - 2018, % to the previous year
Diagram 3. The dynamics of the US dollar against the rupee, 2015 - 2018, Rs. for 1 US dollar
Diagram 4. Production of civil aviation aircraft, 2013 - 2018
Diagram 5. Helicopter production, 2013 - 2018
Diagram 6. Distribution of manufactured aircraft by directions of consumption, shares of volumes in pieces, 2018
Diagram 7. Distribution of manufactured aircraft by directions of consumption, shares of volumes in pieces, 2016
Diagram 8. The structure of aircraft in the Indian market, shares of the annual market volume in units, 2018
Diagram 9. The volume of the aviation market in India, pieces, 2016-2018
Diagram 10. The structure of the aircraft / parts market, shares of volumes in monetary terms, 2018
Diagram 11. The volume and dynamics of aircraft imports (TN VED code 8802), 2016 - 2018
Diagram 12. The volume and dynamics of imports of aircraft parts (HS code 8803) to India, 2016 - 2018
Diagram 13. Shares of producing countries in the volume of imported goods (TN VED code 8802, aircraft), in kind, 2018
Diagram 14. Shares of producing countries in the volume of imported goods (TN VED code 8802, aircraft), in monetary terms, 2018
Diagram 15. Shares of producing countries in the volume of imported goods (TN VED code 8803, aircraft parts), in kind, 2018
Diagram 16. Shares of producing countries in the volume of imported goods (TN VED code 8803, aircraft parts), in monetary terms, 2018
Diagram 17. Shares of manufacturing companies in the volume of imported goods (TN VED code 8802, aircraft), in kind, 2018
Diagram 18. Shares of manufacturing companies in the volume of imported goods (TN VED code 8802, aircraft), in monetary terms, 2018
Diagram 19. Shares of manufacturing companies in the volume of imported goods (TN VED code 8803, aircraft parts), in kind, 2018
20 Chart. Shares of manufacturing companies in the volume of imported goods (TN VED code 8803, aircraft parts), in monetary terms, 2018
Diagram 21. Shares of recipient companies in the volume of imported goods (TN VED code 8802, aircraft), in kind, 2018
Diagram 22. Shares of recipient companies in the volume of imported goods (TN VED code 8802, aircraft), in monetary terms, 2018
Diagram 23. Shares of recipient companies in the volume of imported goods (TN VED code 8803, parts of aircraft), in kind, 2018
24 Chart. Shares of recipient companies in the volume of imported goods (TN VED code 8803, aircraft parts), in monetary terms, 2018
Diagram 25. Aircraft import structure according to MPSA, 2018
Diagram 26. Helicopter import structure according to MPSA, 2018
Diagram 27. Structure of aircraft imports (TN VED code 8802) by price per 1 kg, shares of mass, 2018
Diagram 28. Aircraft import structure (TN VED code 8802) by year of manufacture, 2018
29 Chart. Aircraft export volume (code 8802), 2016 - 2018
Diagram 30. Aircraft parts export volume (code 8803), 2016–2018
Diagram 31. Shares of recipient countries in the volume of exported goods (HS code 8802, aircraft), in kind, 2018
32 Chart. Shares of recipient countries in the volume of exported goods (TN VED code 8802, aircraft), in monetary terms, 2018
Diagram 33. Shares of recipient countries in the volume of exported goods (HS code 8803, parts of aircraft), in kind, 2016-2018
Diagram 34. Shares of recipient countries in the volume of exported goods (TN VED code 8803, aircraft parts), in monetary terms, 2016-2018
Diagram 35. Shares of manufacturing companies in the volume of exported goods (TN VED code 8802, aircraft), in kind, 2018
Diagram 36. Shares of Indian manufacturing companies in the volume of exported goods of Indian origin (TN VED code 8802, aircraft), in physical terms, 2018
Diagram 37. Shares of manufacturing companies in the volume of exported goods (TN VED code 8802, aircraft), in monetary terms, 2018
Diagram 38. Shares of manufacturing companies in the volume of exported goods (TN VED code 8803, parts of aircraft), in kind, 2016-2018
Diagram 39. Shares of manufacturing companies in the volume of exported goods (TN VED code 8803, aircraft parts), in monetary terms, 2016-2018
Diagram 40. Shares of recipient companies in the volume of exported goods (TN VED code 8802, aircraft), in kind, 2018
Diagram 41. Shares of recipient companies in the volume of exported goods (TN VED code 8802, aircraft), in monetary terms, 2018
Diagram 42. Shares of recipient companies in the volume of exported goods (TN VED code 8803, parts of aircraft), in physical terms, 2016-2018
43 Chart. Shares of recipient companies in the volume of exported goods (TN VED code 8803, parts of aircraft), in monetary terms, 2016 - 2018
Diagram 44. Aircraft export structure according to MPSA, 2018
Diagram 45. Helicopter export structure according to MPSA, 2018
Tables
Table 1. Main Quantitative Characteristics of Indian Civil Aviation, 2014-2018
Table 2. STEP-Analysis of Factors Affecting the Indian Aerospace Market
Table 3. Aircraft production volumes by models / manufacturers, 2016 - 2018
Table 4. Aircraft production in India, 2016 - 2018
Table 5. Aircraft on the Indian market, pcs, 2018
Table 6. The fleet of the largest airlines in India, as of 01.01.2019/ /
Table 7. Number of space launches, 2016
Table 8. Number of space launches, 2017
Table 9. Number of space launches, 2018
Table 10. Main types of civil passenger aircraft and their import taxation (India)
Table 11. Import of goods TN VED code 8802 (aircraft) by producing countries, 2018
Table 12. Import of goods TN VED code 8802 (aircraft) by countries - senders, 2018
Table 13. Import of goods TN VED code 8803 (aircraft parts) by producing countries, 2018
Table 14. Import of goods TN VED code 8803 (aircraft parts) by countries - senders, 2018
Table 15. Import of goods TN VED code 8802 (aircraft) by manufacturing companies, 2018
Table 16. Import of goods TN VED code 8803 (aircraft parts) by manufacturing companies, 2018
Table 17. Import of goods TN VED code 8802 (aircraft) by recipient companies, 2018
Table 18. Import of goods TN VED code 8803 (aircraft parts) by recipient companies, 2018
Table 19. Import of aircraft (TN VED code 8802), 2018
Table 20. Import volumes of goods HS codes 8802 and 8803 from Italy, 2018
Table 21. Export of goods TN VED code 8802 (aircraft) by recipient countries, 2018
Table 22. Aircraft exports (code 8802) by origin, 2018
Table 23. Export of aircraft (code 8802), by manufacturers, 2018
Table 24. Export of goods TN VED code 8802 (aircraft) by companies - recipients, 2018
Table 25. Export of aircraft (TN VED code 8802), 2018
Table 26. Import customs duty rates for TNVED code 8802/8803, 2019, %
Table 27. Terms of exemption from payment of duties and VAT for the temporary importation of aircraft
Table 28. Customs duty rates for imports in 2019
Table 29. Certification of civil aircraft, aircraft engines, propellers and airborne equipment of civil aircraft
Table 30. Indian civil aircraft manufacturers
Table 31. Actual budget expenditures under the state program of India ""Development of the aviation industry for 2013-2025"", billion Rs.
Table 32. Extract from the list of state sectoral programs
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