India Indian Economy + Infra Archive

[Nilgiri]

India’s service exports hit all-time high of $273.6 bn in 2022. Outlook is rosy too

Riding on the IT and telecom boom, India’s service exports have nearly doubled in a decade. It’s a bright spot amid huge trade deficit for merchandise exports.

theprint.in

 

[Nilgiri]

India’s share of global iPhone production to be on par with China’s by 2027

That forecast reflects how disruptions in China’s manufacturing industry have prompted global brands like Apple to quickly establish new supply chains across Asia.

www.scmp.com

• India is predicted to account for up to 50 per cent of total iPhone production capacity by 2027, according to the latest forecast from DigiTimes Research
• It is a more aggressive estimate than JPMorgan’s earlier prediction that India would assemble 25 per cent of total iPhones worldwide by 2025

India is expected to assemble up to 50 per cent of Apple’s iPhones by 2027, up from fewer than 5 per cent at present, to be on par with the scale of production in mainland China, according to a new report.

“The speed of supply chain migration to India will be accelerated in the future because of the need to diversify risks in light of uncertainties in China’s pandemic control,” said Luke Lin, analyst at the research unit of tech-focused Taiwanese daily newspaper DigiTimes, in a report published on Tuesday.

India, which surpassed the UK last year to rank as the world’s fifth-largest economy, is already predicted to account for up to 25 per cent of total iPhone production by the end of 2023, and as much as 40 per cent by 2025, the report said.

China, where up to 85 per cent of iPhones globally were produced last year, is at risk of losing its dominant role as a manufacturing hub for Apple devices because of US-China decoupling moves, according to Lin. He expected India and Vietnam to be “the biggest beneficiaries” of Apple’s efforts to shift more of its manufacturing supply chain outside China.

Workers are seen at an assembly line inside Foxconn Technology Group’s smartphone manufacturing complex in Sri City, a special economic zone located in Tirupati district in India’s southeastern state of Andhra Pradesh. Photo: YouTube

The DigiTimes Research forecast is more aggressive than JPMorgan’s earlier prediction that India would assemble 25 per cent of total iPhones worldwide by 2025.

Taiwan-based Foxconn Technology Group, formally known as Hon Hai Precision Industry, has been one of the most aggressive Apple contractors to bolster its efforts in India. The world’s largest electronics contract manufacturer in December made a US$500 million cash injection into its Indian subsidiary, Foxconn Hon Hai Technology India Mega Development.

Other major smartphone brands are also increasing their production outside China, according to the DigiTimes report.

Samsung Electronics, for example, has been shifting more of its Android smartphone manufacturing capacity out of China since 2019, primarily to Vietnam. Samsung smartphone production in China is projected to cease in the next five years, according to the report, as Vietnam and India’s share of assembly work approaches 35 per cent to 40 per cent and 40 per cent to 45 per cent, respectively, by 2027.

That trend reflects how disruptions in China’s manufacturing industry, including snap lockdowns and other Covid-19-related issues, have prompted global brands like Apple and Samsung to quickly establish new supply chains across Asia.

Foxconn, which is Apple’s main iPhone supplier, has scrambled to restore full production capacity at its manufacturing complex in Zhengzhou, capital of central Henan province, following severe disruptions including worker protests that turned violent and the exodus of tens of thousands of employees amid a Covid-19 outbreak that started last October.

The world’s largest iPhone factory in Zhengzhou had gradually recovered to about 90 per cent of maximum capacity as of December 30, according to a report by state media Henan Daily that cited Wang Xue, a deputy manager at the plant.

Smartphone brands other than Apple and Samsung are also expected to see their combined manufacturing capacity in China decrease up to 50 per cent by 2027, down from around 70 per cent in 2023, according to the DigiTimes report.

India’s share of that production capacity is expected to rise up to 35 per cent in the same period, the report said. Vietnam’s share is also expected to increase as much as 15 per cent.

==========================================

@Viva_vietnamm More good news for Vietnam and India.

 

[Viva_vietnamm]

India’s share of global iPhone production to be on par with China’s by 2027

That forecast reflects how disruptions in China’s manufacturing industry have prompted global brands like Apple to quickly establish new supply chains across Asia.

www.scmp.com

• India is predicted to account for up to 50 per cent of total iPhone production capacity by 2027, according to the latest forecast from DigiTimes Research
• It is a more aggressive estimate than JPMorgan’s earlier prediction that India would assemble 25 per cent of total iPhones worldwide by 2025

India is expected to assemble up to 50 per cent of Apple’s iPhones by 2027, up from fewer than 5 per cent at present, to be on par with the scale of production in mainland China, according to a new report.

“The speed of supply chain migration to India will be accelerated in the future because of the need to diversify risks in light of uncertainties in China’s pandemic control,” said Luke Lin, analyst at the research unit of tech-focused Taiwanese daily newspaper DigiTimes, in a report published on Tuesday.

India, which surpassed the UK last year to rank as the world’s fifth-largest economy, is already predicted to account for up to 25 per cent of total iPhone production by the end of 2023, and as much as 40 per cent by 2025, the report said.

China, where up to 85 per cent of iPhones globally were produced last year, is at risk of losing its dominant role as a manufacturing hub for Apple devices because of US-China decoupling moves, according to Lin. He expected India and Vietnam to be “the biggest beneficiaries” of Apple’s efforts to shift more of its manufacturing supply chain outside China.

Workers are seen at an assembly line inside Foxconn Technology Group’s smartphone manufacturing complex in Sri City, a special economic zone located in Tirupati district in India’s southeastern state of Andhra Pradesh. Photo: YouTube

The DigiTimes Research forecast is more aggressive than JPMorgan’s earlier prediction that India would assemble 25 per cent of total iPhones worldwide by 2025.

Taiwan-based Foxconn Technology Group, formally known as Hon Hai Precision Industry, has been one of the most aggressive Apple contractors to bolster its efforts in India. The world’s largest electronics contract manufacturer in December made a US$500 million cash injection into its Indian subsidiary, Foxconn Hon Hai Technology India Mega Development.

Other major smartphone brands are also increasing their production outside China, according to the DigiTimes report.

Samsung Electronics, for example, has been shifting more of its Android smartphone manufacturing capacity out of China since 2019, primarily to Vietnam. Samsung smartphone production in China is projected to cease in the next five years, according to the report, as Vietnam and India’s share of assembly work approaches 35 per cent to 40 per cent and 40 per cent to 45 per cent, respectively, by 2027.

That trend reflects how disruptions in China’s manufacturing industry, including snap lockdowns and other Covid-19-related issues, have prompted global brands like Apple and Samsung to quickly establish new supply chains across Asia.

Foxconn, which is Apple’s main iPhone supplier, has scrambled to restore full production capacity at its manufacturing complex in Zhengzhou, capital of central Henan province, following severe disruptions including worker protests that turned violent and the exodus of tens of thousands of employees amid a Covid-19 outbreak that started last October.

The world’s largest iPhone factory in Zhengzhou had gradually recovered to about 90 per cent of maximum capacity as of December 30, according to a report by state media Henan Daily that cited Wang Xue, a deputy manager at the plant.

Smartphone brands other than Apple and Samsung are also expected to see their combined manufacturing capacity in China decrease up to 50 per cent by 2027, down from around 70 per cent in 2023, according to the DigiTimes report.

India’s share of that production capacity is expected to rise up to 35 per cent in the same period, the report said. Vietnam’s share is also expected to increase as much as 15 per cent.

==========================================

@Viva_vietnamm More good news for Vietnam and India.

Thats what US's companies must do (shifting more factories to VN and India) if they don't wanna rely too much on China's factories and indirectly making CN become so rich and powerfull.

 

[Nilgiri]

Govt nudging Boeing, Airbus to set up assembly lines here | India News - Times of India

India News: The Modi government has sounded out aerospace majors Airbus and Boeing to set up final assembly lines in the country as these two are likely to get or

timesofindia.indiatimes.com

NEW DELHI: The Modi government has sounded out aerospace majors Airbus and Boeing to set up final assembly lines in the country as these two are likely to get orders for nearly 2,000 aircraft from Indian airlines over the next decade or so.

In contemporary times, IndiGo was so far the only Indian carrier placing mega aircraft deals and inducting those planes — with its last 2019 firm order for 300 A320neo family aircraft taking the budget carrier’s total number of A320 family aircraft orders to 730. In the next few weeks, the Tata Group is going to place a big order for hundreds of narrow and wide body Boeing and Airbus for its in-the-works new Air India and low-cost AI Express.

India is going to be among the top aviation markets globally thanks to a growing aspirational middle class for whom air travel is no longer a luxury but a necessity. International travellers have been filling up neighbouring hubs of foreign airlines for decades. The acquisition of AI and AI Express by the Tatas and the pre-existing eminent position of IndiGo means India will have its own mega carriers that will place mega orders. Then there are several smaller airlines too. “We cannot be happy with the aircraft makers just buying components from India, whether with or without offset requirements. It is time Airbus, Boeing and engine majors set up final assembly lines here,” people in the know told TOI.

Comments were sought on the issue from both the aircraft majors and awaited till the time of going to press. Sources in these companies say they are being increasingly nudged in that direction from the government.

Last month, the commerce department had sounded an alarm at the surge in import of aircraft. The import of unladen aircraft (not loaded with goods or passengers) weighing 15,000 kg, valued at over $200 million, had increased 56.5% in April-September 2022 over the same period last year. Imports of certain turbo jets had increased 34% and helicopters of an unladen weight of more than 2,000 kg jumped by 42%, the commerce department had pointed out.
Following this, the aviation ministry had sought steps that could be taken to develop a strategy to bring down the trade deficit.

To be sure, having a final assembly line (FAL) in India means having the entire supply chain ecosystem in the vicinity— right from aircraft body, wings, assembled engines, seats and everything imaginable. For instance, a leading engine major had last year replied that “we need to be close to aircraft FAL” in Toulouse and the US when asked if it planned to have a FAL in India.

“The process will take some years but it must be started now to have the same in place in the next 3-4 years. Otherwise it will remain a chicken-and-egg story,” said people in the know.

The government is of the view that now is the time to take the next step and make commercial aircraft in India too.

Airbus has four A320 family assembly facilities around the world — Toulouse (France); Hamburg (Germany); Tianjin (China) and Mobile (US). The China FAL had commenced operations in 2008 and last November it had commissioned its first A321, something Airbus had described that as deepening “collaboration with China’s aviation industry, and demonstrates Airbus’ commitment to enhance its long-term strategic partnership with China.” India’s IndiGo is the world’s largest customer of the A321neo family of aircraft.

Boeing has all its FALs in the US. It opened a completion centre in China where aircraft assembled in the US are flown to. Fitting of seats and aircraft painting is done in China, hence the name.

People in the know say the critical things while deciding setting up a FAL in a country are the size of its market. “Infrastructure including reliable power, hangars and availability of skilled manpower certified by Federal Aviation Administration (FAA) as every person touching an aircraft needs to be certified. An aircraft has millions of parts so supply chain processes and raw material availability need to be in place,” they say.

Finally, aircraft manufacturers worry if customer orders do not specifically seek guarantees that planes not be made in some places. For instance when Boeing opened its second B787 FAL and delivery facility in South Carolina’s Charleston about 15 years ago, some airline specifically said they wanted their Dreamliners to be from the Seattle FAL. Some years later when airlines realised that the B787s from both the FALs are exactly the same quality-wise, then they dropped this pre-conditions, say people in the know.
Last October, the Tatas and Airbus had announced they will jointly make the C-295 transport aircraft for the Indian Air Force in Gujarat. The defence ministry had at that time described this as “the first project of its kind in which a military aircraft will be manufactured in India by a private company.” Till now, only state-owned Hindustan Aeronautics makes aircraft for the armed forces.

 

[Nilgiri]

Siemens signs 3 billion euro train deal in India

Siemens will deliver 1,200 electric locomotives and provide servicing for 35 years under the agreement, also its biggest ever in India.

economictimes.indiatimes.com

 

[Nilgiri]

India, Vietnam to begin talks on trade agreement

A joint Indo-Vietnamese working group will be formed in the coming months to examine the feasibility of a trade pact

www.livemint.com

@Viva_vietnamm et al.

 

[Viva_vietnamm]

AMBASSADOR SANDEEP ARYA: THERE IS STILL ROOM FOR INDIA AND VIETNAM TO COOPERATE | BUSINESS​

January 23, 2023 by archyde

Vietnamese enterprises attend the 41st India International Trade Fair in November 2022 (Source: VNA)
Indian Ambassador to Vietnam Sandeep Arya said that the high economic growth rates, as well as the strong digital transformation taking place in both India and Vietnam, are creating economic cooperation opportunities for the two countries.
In an interview with VNA on the occasion of the new year 2023, Ambassador Sandeep Arya commented that Vietnam is considered one of the fastest growing economies globally and its economic achievements are immeasurable. impressive.
He predicts Vietnam’s economy could grow by 6.8% or so by 2023.
According to a report by the General Statistics Office of Vietnam, the country’s GDP has grown by 8.02% in 2022, the highest increase in the 2011-2022 period. This is higher than the growth target of 6%-6.5% and the growth rate of only 2.58% in 2021 due to the impact of the COVID-19 pandemic.
“I think Vietnam’s growth story and economic achievements are really making waves around the world,” said Ambassador Sandeep Arya.
He also shared that, before taking up his assignment in Vietnam, he met with leaders and representatives of Indian businesses, and they all expressed their special affection for Vietnam, as well as their impression of the speed of the project. economic growth of Vietnam and highly appreciate the promotion of cooperation with this Southeast Asian country.

Vietnam is performing very well and all the momentum that Vietnam has created in terms of economic growth, foreign trade, foreign direct investment attraction and other economic indicators has really shown that Vietnam Nam will be a promising country in the coming years.

Indian Ambassador to Vietnam Sandeep Arya (Source: Indian Embassy in Vietnam)


According to the Ambassador, there is still a lot of room for India and Vietnam to step up and make important strides in the region bilateral cooperation next time.
Ambassador Arya proposed maintaining joint working mechanisms and trade subcommittees between the two governments to exploit these opportunities, considering the possibility of cooperation in the fields of infrastructure development, digital technology. , financial technology (Fintech), oil and gas exploration, defense technology and shipping.

“If we look at foreign direct investment (FDI) attraction and other economic indicators of both countries, India and Vietnam will lead in terms of global economic growth, therefore , there are many opportunities for both countries to strengthen trade, business and investment cooperation, joint ventures and in many other related fields such as agriculture, food processing, energy,” said Mr. determined.
Ambassador Arya expressed optimism about the bright future of bilateral relations and said that along with a solid foundation from the long-standing traditional friendship, the two countries have complementary economic models and experiences. to share with each other.
Mr. Arya assessed that India and Vietnam have “very bright” prospects for expanding relations. “Next year, we are looking at three or four pillars of our well-established relationship, including trade and investment, defense and security, and people-to-people exchanges,” he said. speak.

Indian Defense Minister Rajnath Singh (right) reviews the honor guard of the Vietnam People’s Army on his official visit to Vietnam from June 7-10, 2022. (Source: VNA)
Ambassador Arya highlighted the good development of the two countries’ diplomatic relations, saying that this relationship is rooted in a stable political foundation, trust, solidarity, mutual understanding and support.
According to him, the “really excellent bilateral relationship” is a solid foundation for the two countries to promote cooperation in many fields, including politics, economy-trade, defense-security, and culture. and tourism in the years to come.
The Ambassador also said that there are many new ideas that he plans to explore and discuss with Vietnamese authorities, because the relationship between the two countries has a really solid foundation for development in the coming years. next year. He pledged to do his best to make them part of a “successful growth story” between the two countries.
Mr. Arya also expressed his excitement about what will be experienced and witnessed for himself in Vietnam during the Lunar New Year. On this occasion, he sent New Year greetings to the leaders and people of Vietnam, wishing Vietnam a new year of success and prosperity.

Ambassador Sandeep Arya: There is still room for India and Vietnam to cooperate | Business – Archyde

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www.archyde.com

 

[Nilgiri]

Global automotive companies eyes India as an R&D hub for their operations | Autocar Professional

Many of these leading automotive MNCs have unanimously chosen the capital of Karnataka, Bengaluru, also referred to as the Silicon Valley of India, for setting up their global technical hubs. Click here for more

www.autocarpro.in

There is much cooperation between Vinfast et al and India to be done this decade @Viva_vietnamm

Lets hope for the best.

 

[Nilgiri]

https://twitter.com/i/web/status/1619689848889307136

 

[Viva_vietnamm]

Global automotive companies eyes India as an R&D hub for their operations | Autocar Professional

Many of these leading automotive MNCs have unanimously chosen the capital of Karnataka, Bengaluru, also referred to as the Silicon Valley of India, for setting up their global technical hubs. Click here for more

www.autocarpro.in

There is much cooperation between Vinfast et al and India to be done this decade @Viva_vietnamm

Lets hope for the best.

VinFast VF 8 suddenly appeared in India, setting its ambitions in the country of billions of people?

14/06/2022 - 08:59

The electric car VF 8 was seen carrying a specialized vehicle in India, causing many people to question VinFast's car sales strategy in this country.
The Instagram account sceii841 specializing in sharing about cars in India has posted a short video showing that VinFast's electric car model has appeared in this country. Accordingly, the "Made in Vietnam" car is carried on a special vehicle, the back of the car's model name is covered but the logo is still left and it is not difficult to recognize that it is the VF 8.

When developing electric car models, VinFast plans to distribute this model globally, including North America and Europe. Therefore, the appearance of the VF 8 in India has created a certain amount of attention and raised questions about the distribution strategy of this car in the country of billions of people.


"What will VinFast do here," account kevinrevvz commented below the video on Instagram. Meanwhile, the nick named high_on_95_octane has great expectations: "If VinFast launches the car, it will permanently suffocate Tesla's market in India".

As a very new name in the car market, of course, there are also people who do not recognize VinFast's electric car model. "Is it Changan (a car manufacturer based in Chongqing, China - PV)" or "Is it Cullinan" among other comments.

Images of the VF 8 appearing in India are discussed on team-bhp - an automotive forum in this country.

The story of VinFast cars appearing in India is also a topic of discussion on the team-bhp forum. "Apparently the car was driven somewhere near Pune (the seventh most populous city in India - PV). VinFast has hired a partner in an effort to develop a technical service center in Pune. Possibly for the purpose test destination", commented Gaur account.

Agreeing with the above opinion, the SPIKE ARRESTOR account said that VinFast's model "will undergo tests at a facility in Pune in the next few months".

India is considered a potential market for electric vehicles. The attraction comes from the world's second largest population with about 1.4 billion people. The government also has moves to promote electric vehicles. Indians are tending to switch from petrol motorbikes to electric motorbikes and buy more electric cars.

VinFast VF 8 bất ngờ xuất hiện tại Ấn Độ, đặt tham vọng ở đất nước tỷ dân?

(Dân trí) - Chiếc ô tô điện VF 8 được bắt gặp chở trên xe chuyên dụng tại Ấn Độ, khiến nhiều người đặt câu hỏi về chiến lược bán xe của VinFast tại quốc gia này.

dantri.com.vn

 

[Nilgiri]

It is a good read @Iceream et al

Small factories won’t do anymore, we need mega ones: Sunil Vachani, founder, Dixon Technologies

Improvements in the custom-duty structure; clearances to acquire large swaths of land to build clusters; uninterrupted power supply from grids; ability to design products; and above all, achieving scale — these are some of the measures that can catapult India into the top tier of global...

economictimes.indiatimes.com

 

[Zapper]

https://twitter.com/i/web/status/1625525794960277506

 

[Zapper]

US President Joe Biden, French President Emmanuel Macron and UK Prime Minister Rishi Sunak hailed Air India's multi-billion dollar deal to buy planes from Airbus and Boeing​

• Air India's 470-plane deal is single largest by an airline
• Airline to lease another 25 jets bringing total close to 500
• U.S., European leaders hail "historic" deal
• Air India aims to compete with Gulf carriers

BENGALURU/PARIS, Feb 14 (Reuters) - Air India unveiled deals on Tuesday for a record 470 jets from Airbus and Boeing, accelerating the rebirth of a national emblem under new owners Tata Group as Europe and the United States hailed deepening economic and political ties with New Delhi.

The provisional deals include 220 planes from Boeing (BA.N) and 250 from Airbus (AIR.PA) and eclipse previous records for a single airline as Air India vies with domestic giant IndiGo to serve what will soon be the world's largest population.

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U.S. President Joe Biden called the agreement "historic" and discussed it by telephone with Indian Prime Minister Narendra Modi - part of a flurry of high-level reactions as the scale of India's needs provided a rare bonanza for both competing plane giants in an industry where the winner usually takes all.


The Airbus order includes 210 A320neo narrowbody planes and 40 A350 widebody aircraft, which Air India will use to fly "ultra-long routes", Tata Chairman N Chandrasekaran said.

Boeing will supply 190 737 MAX, 20 of its 787 Dreamliners and 10 mini-jumbo 777X.

Together with another 25 Airbus jets to be leased, the overall acquisition reaches 495 jets, an Airbus executive said.

Reuters exclusively reported in December that Air India was nearing record airplane orders approaching 500 jets.

Shares in Boeing rose 1.3% and Airbus rose 0.3%.

The airline's renaissance under the Tata conglomerate aims to capitalise on India's growing base of fliers and large diaspora across the world.

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New CEO Campbell Wilson is working to revive its reputation as a world-class airline and shake off its image as a tardy, run-down operation with an ageing fleet and poor service.

Indian and French leaders highlighted the political and economic importance of a deal involving the national airline.

"This important deal shows, along with the deepening of relations between India and France, the successes and aspirations of the civil aviation sector in India," Modi said during a video ceremony with French President Emmanuel Macron.

"This achievement shows that Airbus and all its French partners are fully dedicated to develop new areas of dedication with India," Macron said.

The aviation deal is expected to have industrial spin-offs, with Macron pledging co-operation in other sectors.

Chandrasekaran said Airbus and Tata were working on bigger partnerships, including an ambition "to bring in commercial aircraft manufacturing at some point in time in the future".

Industry sources say India has repeatedly lobbied for Airbus to add a final assembly line in the country, matching a plant in northern China, but that the plane maker has so far rejected the idea on financial and industrial grounds.

INDIA'S GROWING INFLUENCE​

Air India's order tops American Airlines' (AAL.O) combined deal for 460 Airbus and Boeing planes more than a decade ago.

The first aircraft to arrive will be 25 brand-new Boeing 737 MAX planes and six Airbus A350s in the second half of 2023, with deliveries really ramping up in 2025 and beyond.

Even after significant expected discounts, the deal is worth tens of billions of dollars at a volatile time for plane giants whose jets are again in demand after the pandemic, but who face mounting industrial and environmental pressures.

"It is important for the industry because given the recent turbulence in the China market, the alternative growth market is India," said independent aviation adviser Bertrand Grabowski.

"India is also sending a strong political signal that it wants to remain attached to the West at a time when it has appeared ambiguous on Russian sanctions," said Grabowski, a former banker with extensive experience of international deals.

The deal includes a major win for engine maker CFM International, a joint venture between General Electric (GE.N) and France's Safran (SAF.PA). It has been selected to power 210 Airbus narrowbody jets ahead of rival Pratt & Whitney (RTX.N), while bigger jets will be powered by GE or Britain's Rolls-Royce (RR.L).

British Prime Minister Rishi Sunak said the deal would create new jobs.

"Besides this deal being of unprecedented size, it was also incredibly complex," Wilson said in a note to employees.

Air India, with its maharajah mascot, was once known for its lavishly decorated planes and stellar service but its reputation declined in the mid-2000s as financial troubles mounted.

The record order aims to put Air India in the league of large global airlines and make it an influential customer for planemakers and suppliers at a time when its home market is seeing a strong post-COVID-19 travel surge.

It reflects a strategy to recapture a solid share of trips between India's diaspora and cities such as New Delhi and Mumbai that are currently dominated by foreign rivals such as Emirates.

It will also put Air India on a stronger footing to compete with domestic rival IndiGo (INGL.NS), which has a majority share of the Indian market and a strong position in regional flights.

https://www.reuters.com/business/ae...ndia-agrees-buy-250-planes-airbus-2023-02-14/

https://www.indiatoday.in/world/sto...5?utm_source=taboola&utm_medium=recirculation

 

[Zapper]

How secret London talks led to Air India's gigantic plane order​

By Aditi Shah and Tim Hepher

[1/3] A bird flies over a logo of Air India airlines at the corporate headquarters in Mumbai, India, October 19, 2021. REUTERS/Francis Mascarenhas

123

• Summary
• Companies

• Air India seals order for close to 500 jets from Airbus, Boeing
• Negotiators camped out at luxury Tata-owned London hotel
• New airline owners seen as "methodical and tough" negotiators
• GE seen as a winner after sweeping engine deals

BENGALURU/PARIS, Feb 14 (Reuters) - Air India's record aircraft deal has put the Tata Group-owned airline in the league of aspiring global carriers.
On Tuesday, it provisionally agreed to acquire almost 500 jets from Airbus (AIR.PA) and Boeing (BA.N) to take on domestic and international rivals.
Striking the largest ever deal by one airline took months of secret talks carried out a stone's throw from Britain's Buckingham palace and culminating in a celebration over coastal Indian curries, according to people involved in the talks.


Confidentiality was lifted on Tuesday as leaders hailed the accord in a diplomatic embrace between leading G20 nations. Tata Group, which regained control of Air India last year after decades of public ownership, put out just six paragraphs.
Its low-key announcement illustrates a rising breed of private airline owners transforming a financially-risky Indian airline sector, alongside the publicity-shy founders of IndiGo.

​

The deal was in the making for over a year, insiders said, recounting details of the process on condition of anonymity.
Serious talks began last summer and continued until days before Christmas when outlines were agreed. As the astonishing scale of the deal began to crystallise, Reuters reported in December the parties were nearing a record 500-plane agreement.
The epicentre of dealmaking was St James' Court - a luxury Victorian hotel near Buckingham Palace in London's West End.
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In the hothouse atmosphere of a classic aircraft industry negotiating ritual known as a "bake-off", negotiators from the airline, planemakers and engine giants camped out at the Tata-owned hotel and neighbouring suites for days at a stretch.
They were chasing a bigger slice of a fast-growing market that has seen many airline growth plans rise and fall.
Now, Boeing had a chance to restore its position in India's single-aisle jet market and narrow Airbus' large lead. Airbus wanted a bigger piece of the wide-body market led by its rival. With bulging order books, neither could sweep the whole order.
At stake was India's bid to win back the custom of visitors and its own diaspora from highly efficient Gulf carriers. Politics set the context but talks were commercial - and tough.
"The convergence of the political will of the country to regain sovereignty of international connectivity, combined with the ambition of the mighty Tata ... if things are done right it has all the ingredients to be really solid," Airbus Chief Commercial Officer Christian Scherer told Reuters on Tuesday.

'METHODICAL, TOUGH'​

The contest for attention played out across London on a chilly day in December as Airbus found itself in talks with Air India on one side of the capital, while fighting Qatar Airways in court over the fate of similar A350 jets just two miles away.
Airbus and Qatar Airways later settled their contractual and safety row, but Air India jumped ahead of Qatar in the queue for smaller jets though sources say the Gulf airline also won hefty damages.

Negotiations led by Air India's chief commercial and transformation officer, Nipun Aggarwal, and Yogesh Agarwal, head of aircraft acquisitions, often stretched into the night with sellers churning out new "best offers" fuelled by room service.
"Air India negotiated hard and the team is very sharp despite having no prior aviation experience. They compare with some of the best dealmakers in the business," one person said.

A second person who watched the billions fall into place said the Air India negotiators were "methodical, tough and very sophisticated".
The London negotiations ended with a dinner at the hotel's Michelin-starred Indian restaurant Quilon, renowned for its seafood and coastal cuisine from places like Goa and Kerala.

While the major focus in any jet deal is the battle between planemakers, engines are often key and can speed or hold up the wider deal. Plans for announcements on the anniversary of Tata's Air India takeover slipped as engine talks wore on.
The biggest overall winner, insiders say, is General Electric (GE.N) which picks up the lion's share of the lucrative engine deals, with its CFM joint-venture with Safran (SAF.PA) beating Raytheon-owned (RTX.N) rival Pratt & Whitney on Airbus A320neos. Rolls-Royce (RR.L) also got a boost from the sale of 40 Airbus A350s.

Highlighting the long road to strategic deals in aviation, GE's victory had been in the making for about 10 years.
In 2014, it won a tender for 27 engines for Air India A320s. Soon after it convinced Vistara to take on its engines for seven aircraft which later translated into an order for 70 planes. The turning point was IndiGo, which switched from Pratt & Whitney after technical issues that Pratt says have been resolved.

Analysts caution many obstacles remain to Air India's plans. It needs better service and efficiency to make a serious dent in the powerfully entrenched hubs of Doha and Dubai.
But India's potential will continue to lure dealmakers. CAPA India reports IndiGo is exploring its own order for 500 jets.

https://www.reuters.com/business/ae...d-air-indias-gigantic-plane-order-2023-02-14/

 

[Zapper]

@Nilgiri I think the worst part of this deal is our inability to get an assembly line in India given Indigo airlines is set to place another order for ~500 aircrafts later this year

While splitting the order between Airbus and Boeing is primarily for strategic reasons, I wonder if giving the entire order to Airbus would've compelled them to open a production facility in India

 

[Zapper]

Air India to get a brand makeover, London based consultancy firm roped in

Tata Sons has roped in London-based brand and design consultancy firm Futurebrands to redraw Air India’s branding strategy.
Futurebrands – which has worked on rebranding of American Airlines and British luxury automobile brand Bentley and branding of the 2012 London Olympics – will work to refurbish Air India’s identity as it targets to become an airline of choice across the world, a person aware of the development said.

Among multiple strategies being considered is creating a new mascot for the airline as there is a thought that the current one of Maharajah has become outdated. Air India is currently not using the Maharajah logo in its campaigns of new destination launches.

The logo was created by Bobby Kooka in 1946 when he was commercial director of the airline

“No decision has been taken. There will be multiple rounds of discussions based on the consultant’s report, cost estimation, and positioning of new Air India that the group intends,” said the person cited above. “But there is definitely a requirement to refurbish the image in a modern world where it intends to compete with the likes of Emirates and Singapore Airlines.”

Air India did not respond to a query on the same.

The airline has also hired Sunil Suresh, a former MakeMyTrip executive who has joined as chief marketing officer, and Colin Neubronner, who had earlier worked on branding of Singapore Airlines and Jet Airways, as part of a new brand-building team.

A new branding strategy for the airline has become important as Tatas are simplifying their aviation portfolio by merging four airline brands into two airlines

While the salt-to-steel conglomerate is amalgamating Vistara into Air India to create a full service airline by 2024, it is also in the process of merging AirAsia India and Air India Express to create a low-cost airline.

People involved in the process said that while the name Vistara will be phased out, it is possible that some features of the brand campaign will still be part of the new brand identity of Air India.

Vistara, which draws its name from the Sanskrit word ‘vistaar’, took to the skies for the first time in January 2015. In a short period, the brand has become popular among fliers in Indian metros but it has limits regarding its reach outside India.

The Tata group is also working to have a new brand identity for the low cost product which will be created from the merger of Air India Express and AirAsia India, people aware of the development said.

As per its agreement with Malaysian-based airline group AirAsia, which has exited AirAsia India, the AirAsia brand can be used for one year till mid of 2023.

Among multiple names being considered for the low-cost airline are Connect and Connections by Air India, people in the know said. A new corporate name, ‘AIX Connect Private Limited’ has been proposed to the Ministry of Civil Aviation for the merged entity, they said.

“Air India Express is a brand that is currently popular among a certain section of customers, specially flying from South India to Gulf,” an airline executive said. “As the airline aims to operate in a new geographic area including domestic and international, it is necessary that it has a refurbished brand,” the person added.

https://economictimes.indiatimes.co...get-a-brand-makeover/articleshow/95921330.cms

 

[Nilgiri]

@Nilgiri I think the worst part of this deal is our inability to get an assembly line in India given Indigo airlines is set to place another order for ~500 aircrafts later this year

While splitting the order between Airbus and Boeing is primarily for strategic reasons, I wonder if giving the entire order to Airbus would've compelled them to open a production facility in India

More than strategic reasons, simply the reason for splitting between Airbus and Boeing is the scale of this order and the production line capacities and order books they already have regarding that.

i.e If Air India wants ~ 500 large aircraft in a certain amount of time, there simply was no way to get this from just one supplier.

As for what India should do to have higher chance of aircraft assembly ecosystem growing at this stage, it would be something along the lines of getting something like a collab between say Tata and Embraer IMO.

India current GDP (and all related numbers) wont attract the likes of a whole production line from Airbus or Boeing.....it will have to double and triple first and get to dbl digit trilion USD for that (and develop scale in a whole host of the prerequisite ancillary industries and manufacturing).

This is simply how corporate interest works in these two large conglomerates and how their allocation is committed with their own trade unions and politicians (regarding jobs and investment there).

India can do lot more with Brazil and Embraer first IMO at its current GDP trajectory this decade.

 

[Zapper]

More than strategic reasons, simply the reason for splitting between Airbus and Boeing is the scale of this order and the production line capacities and order books they already have regarding that.

i.e If Air India wants ~ 500 large aircraft in a certain amount of time, there simply was no way to get this from just one supplier.

As for what India should do to have higher chance of aircraft assembly ecosystem growing at this stage, it would be something along the lines of getting something like a collab between say Tata and Embraer IMO.

India current GDP (and all related numbers) wont attract the likes of a whole production line from Airbus or Boeing.....it will have to double and triple first and get to dbl digit trilion USD for that (and develop scale in a whole host of the prerequisite ancillary industries and manufacturing).

This is simply how corporate interest works in these two large conglomerates and how their allocation is committed with their own trade unions and politicians (regarding jobs and investment there).

India can do lot more with Brazil and Embraer first IMO at its current GDP trajectory this decade.

Makes sense...But what is the confidence passengers and market might have on Embraer aircrafts from a reliability standpoint, not to mention their lineup is for regional flights and none in the long haul segment nor to they offer the variants/amenities/options as Boeing or Airbus

Secondly, building a world class airlines with non-Airbus/Boeing fleet might do more harm than good from a PR perspective

Embraer E-190 range

 

[Nilgiri]

Makes sense...But what is the confidence passengers and market might have on Embraer aircrafts from a reliability standpoint, not to mention their lineup is for regional flights and none in the long haul segment nor to they offer the variants/amenities/options as Boeing or Airbus

Secondly, building a world class airlines with non-Airbus/Boeing fleet might do more harm than good from a PR perspective

Embraer E-190 range

View attachment 54128

Well when I lived in Toronto, from time to time I would go aviation spotting + photography nearby the airport there with fellow aviation enthusiast friends of mine.

There were always a decent number of embraer jets flying among the others (Airbus, Boeing, Bombardier), normally on domestic routes of the local airlines of North America..... hence FAR/CAR certified and thus reliable and trusted in the end relative to the others.

If there is little movement with Airbus and Boeing w.r.t Indian assembly line (given constraints on their end and our end as well relative to the market, investment and labour dynamics), then Embraer should definitely be looked at as it will help propel the larger development of ancillary network industries that will help attract Airbus and Boeing to then establish at their earliest feasible (final assembly) commitment when they do come around say 10 - 20 years later or whenever.....to add to their current component manufacture and MRO etc within India.

The regional market in India alone is going to be quite big along with short-hop market to Middle East and South East Asia etc.

So there is definite market size for embraer current competency in the 40 - 60 ton jet aircraft range they produce alongside Indian turboprop aircraft market that they are already in some level of discussion with India about. The turboprop ecosystem will be boosted by Airbus/CASA (C-295) JV investment (with Tata) into that assembly line as well this decade. There is similar (earlier) reason why NAL Saras project is in small turboprop class.

For comparison the A320 is in the 70 - 90 ton range (being assembled for example outside of France in Tianjin, China with its current block of 10 - 20 trillion GDP range).

So the pyramid build up vertically and laterally definitely has room for this transition phase involving this size of domestic and regional range aircraft to prove core competency to better attract and entrench next sizes/ranges later.

We are talking about 10 year and 20 year blocks of time in the end, I just don't think Airbus and Boeing are going to do assembly in India till later....so it serves us well to grow what can be grown in the meantime with more mid range companies and expertise.

 

[Zapper]

https://twitter.com/i/web/status/1626048173784600576