India’s maintenance, repair and overhaul (MRO) industry is on the cusp of significant expansion, driven by accelerating aircraft procurement, burgeoning air passenger traffic and strong policy support from the government. The country has emerged as the world’s third-largest domestic aviation market, with airports handling approximately 250.73 million domestic passengers between January 2025 and September 2025. Meeting this rising demand requires a substantial scale-up in fleet size. India’s aircraft fleet has already grown to over 840 aircraft and an additional 2,200 aircraft are expected to join the fleet over the next 20 years. This fleet augmentation is expected to translate into a strong and sustained rise in demand for MRO services, creating opportunities for domestic capability development and reduced dependence on foreign maintenance facilities.
Policy overhaul
Policy reforms have been a key driver of MRO growth. The National Civil Aviation Policy 2016 granted MRO “infrastructure status,” enabling access to low-cost financing. In 2021, new MRO-specific guidelines were introduced, abolishing lease royalties at Airports Authority of India airports, simplifying land allotment and promoting transparency in procurement.
More recently, the Bharatiya Vayuyan Adhiniyam, 2024, which came into effect from January 2025, replaced the Aircraft Act, 1934 and explicitly recognised maintenance, design and manufacture for the first time in legislation. Further, the Protection of Interests in Aircraft Objects Bill has received Lok Sabha and Presidential approval, paving the way for easier aircraft leasing and financing in India. Additionally, the Directorate General of Civil Aviation has launched a 360-degree audit system in June 2025, which applies to all scheduled, non-scheduled, private air operators, as well as MRO organisations.
Tax changes have also been an important factor contributing to MRO growth. GST on MRO services was reduced from 18 per cent to 5 per cent. Furthermore, in July 2024, a uniform 5 per cent IGST was applied to all aircraft parts and engines. Further, the sector benefits from 100 per cent foreign direct investment through the automatic route.
Infrastructure growth
The MRO capacity is expanding rapidly, with several major projects underway to enhance domestic maintenance capabilities and reduce overseas dependency. At the Kempegowda International Airport in Bengaluru, IndiGo is setting up an MRO facility spanning over 31 acres, featuring up to 12 bays to service both narrow- and wide-body jets. It is expected to become operational by 2028. Air India is also establishing a 35-acre mega base-maintenance hub at the airport. In Bhubaneswar, Odisha’s first MRO facility at Biju Patnaik International Airport, utilising a 4,670-square-metre hangar has been handed over by the government to Air Works India for development, operation and management, with operations expected to begin by early 2026. Further, Madhya Pradesh’s first MRO facility is set to be established by 2026 at Raja Bhoj Airport in Bhopal, at a cost of Rs 250 million. Spread over 1.5 acres, it will serve both domestic and international airlines.
In another notable development, Hindustan Aeronautics Limited (HAL) has entered into the MRO segment with the overhaul of an A320 aircraft at its Nashik facility. HAL also signed an MoU with Star Air in September 2025 to establish a dedicated MRO facility for Embraer aircraft in India, a first for South Asia.
Moreover, Indian MRO companies are moving up the value chain. GMR’s Hyderabad MRO now performs heavy checks and full aircraft repainting for airlines, reducing the need for Indian carriers to send aircraft abroad. Boeing’s partnership with AI Engineering Services Limited (AIESL) in Nagpur has strengthened India’s ability to maintain wide-body aircraft, while Thales has opened a new avionics MRO hub in Gurugram to service critical flight systems. Thales also signed two strategic contracts with IndiGo, an 11-year avionics maintenance deal for over 1,200 Airbus A32X aircraft and a five-year fleet-wide AvioBook Electronic Flight Bag roll-out. Maintenance will be handled at Thales’s new Gurugram MRO. In Thiruvananthapuram, AIESL has received the European Union Aviation Safety Agency Part-145 certification, becoming the first in South India capable of servicing European-registered aircraft, including advanced military platforms such as the F-35, with plans for a new wide-body hangar underway. These developments highlight the potential of Indian MROs to handle high-value, complex maintenance work.
Sustainability imperative
Sustainability is becoming central to MRO planning and operations. The Thiruvananthapuram facility has adopted energy-efficient designs, electric ground handling equipment and waste-reduction measures. Parallelly, MRO operations are aligning with the country’s sustainable aviation fuel roadmap to reduce carbon footprint. Similarly, the upcoming MRO facility at Raja Bhoj Airport in Bhopal is being designed with strong environmental considerations, featuring advanced waste management systems and energy-efficient infrastructure.
Outlook
India’s MRO landscape is expanding rapidly. The MRO market in India, worth $1.7 billion in 2021, was valued at around $2 billion in 2024 and is expected to reach $4 billion by 2031, registering a compound annual growth rate of 10-12 per cent. The number of facilities has increased from 96 in 2014 to 154 as of June 2025.
Indian carriers spend 12-15 per cent of their revenue on maintenance, over half of which goes toward engine and component repairs, which are mostly sourced abroad. Although over 80 per cent of MRO work is still carried out overseas, fleet expansion and policy support are driving strong domestic growth. With skilled, cost-competitive labour and improving infrastructure, India is well positioned to meet its own needs and emerge as a regional MRO hub for Asia, the Middle East and Africa.
