Private equity funding is giving a major boost to India’s aerospace manufacturing sector. Dr S. Dwarakanath said, “That is the big difference between what we had in 2004 and 2006 and now- the availability of private capital.” Companies now use this money to expand capacity and build better products.
Private equity flowing into the aerospace industry is a key enabler for India’s aerospace manufacturing sector, with companies expanding capacity and moving into higher-value activities as global aircraft makers diversify their supply chains.
The funding opportunity comes as other deep-tech sectors have gained momentum through clearer policy frameworks. Defence technology has benefited from initiatives such as the Defence Acquisition Procedure and Innovations for Defence Excellence (iDEX), while the opening up of the space sector has been accompanied by the creation of IN-SPACe and liberalised foreign direct investment norms.
In aerospace manufacturing, private equity is emerging as an important source of capital for companies looking to expand capacity and move into higher-value work.
Speaking to businessline, Dr S. Dwarakanath, Director General, AIA said access to private capital was a key difference between the current growth cycle and the first wave of private-sector aerospace manufacturing in India around 2004–08, when companies struggled to scale up due to limited funding options.
“That is the big difference between what we had in 2004 and 2006 and now- the availability of private capital. At that time, we did not have it, and that became very difficult for the companies to expand and grow and scale. But that’s something which is much more available now,” he said.
The availability of capital comes at a time when global aircraft manufacturers, including Airbus and Boeing, are looking to expand their supplier base in countries such as India to address production and supply-chain constraints.
Dwarakanath said the Indian aerospace manufacturing industry was expected to grow from about $2 billion currently to $20 billion over the next decade. The industry also wants Indian companies to increase their share of the global aerospace supply chain from the current 1–2 per cent to 10 per cent.
The sector is looking to move beyond build-to-print manufacturing towards design-and-build capabilities and proprietary products such as motors, actuators and smaller aircraft subsystems. Higher domestic value addition and intellectual property creation will also be important to capture a larger share of the opportunity.
He said industry, academia and the government would need to work together to help Indian companies build globally competitive aerospace capabilities.
He spoke in the run-up to AeroConnect 2026, the inaugural conference of the Aerospace India Association (AIA), which will be held on 19 November 2026 in Bengaluru.
The event will bring together over 300 delegates, including aerospace industry leaders, manufacturers, suppliers, government representatives and academia. Themed “Nurturing the aerospace ecosystem,” the conference will feature discussions on aviation, building a globally competitive aerospace supply chain, emerging technologies in design and manufacturing, and investment opportunities. Speakers include Dr Kota Harinarayana, former Head of LCA Tejas Program, Thomas Kopinitz, MD, Hermle WWE AG, alongside other industry experts.