Amid constrained Western supply chains and rising geopolitical risks, aerospace giants like Airbus and Rolls-Royce are increasingly sourcing components from India, driving the local industry from basic manufacturing into design, engineering, and systems integration. Backed by low-cost labor, supportive policies, and improving infrastructure, India is rapidly emerging as a global aerospace hotspot, aiming to capture 10% of the market in the next decade. Simultaneously, Taiwanese firms are responding to the “China+1” strategy by boosting investments in India and planning industrial parks in Telangana to diversify risk and seize new opportunities. By combining India’s cost and workforce advantages with Taiwan’s precision manufacturing and certification expertise, the two sides are poised to build a cost-competitive, high-value aerospace supply ecosystem—creating a win-win scenario in the global industry.
Emerging Trends in the Global Aerospace Supply Chain
The global aerospace supply chain continues to face intensifying disruptions, with industry giants like Airbus, Rolls-Royce, and Collins Aerospace increasingly turning to India for component sourcing. This shift aims to bypass bottlenecks caused by Western production restrictions and recurring labor strikes.
Reports highlight India’s rapidly expanding aerospace ecosystem. Hical Technologies, based in Bangalore, plans to double its aerospace revenue within three years to ₹500 million (around USD 57 million). Meanwhile, JJG Aero has seen explosive growth—climbing from a modest ₹12–17 million (roughly USD 200,000) base to ₹1.74 billion (about USD 20 million) over the past six years.
The Asia-Pacific aerospace sector is also shining, with 2024 revenues projected to be 54% higher than in 2019. In India, now the world’s third-largest aviation market by seating capacity, strong order books from carriers like IndiGo and Air India are driving local suppliers to move beyond basic manufacturing and into higher-value areas such as design, engineering, and systems integration.
Major players, including Airbus, have already awarded contracts like aircraft doors to Indian suppliers. The long-term goal: capture 10% of the global aerospace supply chain within the next decade.
The Rise of India’s Aerospace Manufacturing and the Shift in Global Supply Chains
Several factors are fueling the rapid rise of India’s aerospace industry. First, the country offers a large pool of relatively low-cost yet highly skilled engineers, combined with a broad manufacturing base that makes aerospace component production cost-competitive. The government has also rolled out supportive policies—such as easing investment thresholds in aerospace and defense, and encouraging the use of locally sourced materials like aluminum, steel, and titanium—to enhance the value added within the supply chain. In addition, improvements in aviation and transport infrastructure, along with incentive programs from both central and state governments, are accelerating the maturation of India’s aerospace supply chain.
At the same time, persistent pressures and uncertainties in Western supply chains are pushing companies to accelerate their diversification strategies. Post-pandemic labor shortages, port congestion, and raw material scarcity remain serious challenges, compounded by geopolitical concerns over heavy reliance on China. As the CEO of RTX (formerly Raytheon Technologies) noted, the supply chain has remained under significant strain after the pandemic, while access to skilled technical talent has become increasingly difficult. Against this backdrop, aerospace companies worldwide are seeking secondary supply sources to diversify production and procurement. In reducing dependence on China, India has emerged as the most attractive alternative—quickly benefiting from this trend and establishing itself as a new hotspot for Western aerospace firms.
Taiwanese Enterprises: Strategic Shifts and Global Realignment
At the same time, Taiwanese manufacturers are actively responding to the “China+1” strategy by shifting parts of their production and supply chains from China to India. According to Reuters, under the pressures of U.S.–China trade tensions, Taiwanese companies have been gradually relocating supply chains toward India. Taiwan’s cumulative direct investment in India over the past five years has exceeded USD 665 million—well above the USD 277 million recorded between 2006 and 2017. This trend shows that beyond their traditional strengths in electronics and smartphone assembly, Taiwanese firms are also expanding into sectors such as automotive components and footwear.
Riding this wave of strategic expansion, India has accelerated its efforts to attract Taiwanese investors with favorable policies. For example, the southern state of Telangana is working with Taiwanese companies to develop “Formosa Town,” a Taiwan-focused industrial park spanning more than 14,000 acres. The park, fully owned by a local development group, offers permanent land rights, along with comprehensive incentives covering factory construction, logistics, and workforce training. Already, 11 Taiwanese companies have signed investment commitments totaling roughly INR 20 billion (around USD 230 million), with the potential to create hundreds of thousands of jobs.
For many Taiwanese businesses, this move is not only about mitigating risks under the “China+1” framework but also about seizing early-mover advantages in the Indian market. At a recent press conference in Taipei, several executives noted that if the U.S. adopts another round of high-tariff policies following next year’s presidential election, establishing operations in India will serve as a crucial hedge against geopolitical risks. Clearly, both Taiwan and India are leveraging political and economic momentum to drive a new wave of cooperation and strategic alignment.
India–Taiwan Cooperation: Collaborative Growth for a Win-Win Future
Taking into account the strengths of both India and Taiwan, the potential for collaboration in the aerospace sector is immense. Indian aerospace companies benefit from access to lower-cost raw materials and manufacturing bases—supported by government initiatives that promote the use of locally sourced aluminum, steel, and titanium—along with a large pool of young engineering talent. Taiwan, on the other hand, brings decades of expertise in high-precision manufacturing, quality control, aerospace certification processes, and established global customer networks.
Taiwan’s aerospace components—ranging from aircraft structures and composite parts to avionics and satellite technologies—have a high production value, with about 70% exported overseas, underscoring the maturity of its supply chain. By combining India’s cost and workforce advantages with Taiwan’s precision manufacturing capabilities, a competitive and high-value aerospace ecosystem can be created.
Looking ahead, if Taiwanese aerospace firms further invest in India—whether by building factories or forming local partnerships—they will not only meet India’s rapidly growing market demand but could also position themselves as new production hubs for global aerospace giants in Asia. Overall, the rise of Indian aerospace manufacturing, combined with Taiwan’s industrial strengths, will not only reinforce India’s domestic supply chain but also provide fresh momentum for Taiwan’s global expansion—creating a truly win-win path for development.
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