Rammohan Naidu Outlines Strategic Initiatives to Strengthen India’s MRO Sector

Highlighting the government's dedication to creating an optimal environment for both domestic and international airlines, the Minister underscored efforts to enhance India's MRO facilities.

In a robust commitment to advancing India's Maintenance, Repair, and Overhaul (MRO) sector, Union Minister for Civil Aviation, Shri Rammohan Naidu, addressed key developments and strategies in the Lok Sabha yesterday. Highlighting the government's dedication to creating an optimal environment for both domestic and international airlines, the Minister underscored efforts to enhance India's MRO facilities.

Key Highlights of the Address:

Growing Demand and Global Competitiveness: Minister Naidu acknowledged the increasing demand for MRO services in India, aiming to cater to both domestic and international airlines. "India's geographical advantage enables us to offer competitive MRO facilities to numerous international airlines," he noted, emphasizing India's potential as a global player in the MRO industry.

Integration into Global Value Chains: Addressing concerns about aligning with international standards, the Minister assured that efforts are underway to integrate Indian MRO facilities into global value chains. The aim is to make India a preferred destination for international airlines by adhering to global best practices.

PLI Scheme for MROs: Naidu highlighted the Production Linked Incentive (PLI) scheme's potential to drive growth in the MRO sector. The government is considering extending this scheme to further boost the industry, depending on demand.

GST Reforms: A significant reform in the GST structure for MRO services was announced. Effective from July 15, 2024, a uniform IGST rate of 5% will be applicable to all aircraft components and engines, simplifying taxation and addressing issues like inverted duty structures. This reform is expected to propel the MRO industry from its current $2 billion valuation to $4 billion by 2031.

Support and Incentives for MRO Facilities: The Ministry of Civil Aviation is facilitating the establishment of MRO facilities across India for both domestic and international airlines. The government is committed to providing comprehensive policy and regulatory support to ensure the success of these initiatives.

Customs Duty Exemption and FDI Facilitation: The government has extended the period for exporting goods imported for repairs from 6 months to 1 year. Customs duty on tools and toolkits has been exempted, and 100% Foreign Direct Investment (FDI) via the Automatic Route is now permitted for MROs. These measures are designed to optimize Turn Around Time (TAT) and enhance the industry's growth potential.

Shri Rammohan Naidu's address reaffirms the government's commitment to bolstering India's MRO sector through strategic reforms, incentives, and international integration. These efforts aim to position India as a key player in the global MRO landscape while fostering domestic growth and sustainability.