Parliamentary Panel Warns 85% of Aircraft Maintenance Is Outsourced Abroad, Raising Security Concerns

Parliamentary Panel Highlights Risks of Outsourcing Majority of Aircraft Maintenance Abroad

India’s civil aviation sector is confronting significant strategic and economic vulnerabilities due to its extensive dependence on foreign maintenance services, according to a recent report by a Parliamentary panel. The Department-Related Parliamentary Standing Committee on Transport, Tourism and Culture, chaired by JD(U) MP Sanjay Kumar Jha, disclosed that nearly 85% of Maintenance, Repair, and Overhaul (MRO) activities for Indian aircraft are carried out overseas at centres certified by Original Equipment Manufacturers (OEMs).

Strategic and Economic Implications of Outsourcing

The committee characterized this heavy reliance on foreign MRO services as a “national issue,” emphasizing that the practice transcends mere cost considerations and poses serious challenges to India’s self-reliance and security. Despite the existence of domestic MRO providers, Indian airlines predominantly send aircraft abroad for heavy maintenance and major component overhauls. This trend has led to underutilisation of local facilities, increased operational costs, and extended turnaround times, thereby affecting overall fleet efficiency.

Several factors contribute to this dependence on foreign hubs. Indian operators face a challenging environment marked by high taxes on imported spare parts, cumbersome customs procedures, inadequate infrastructure, and delays in securing international certifications. These obstacles are further exacerbated by a shortage of skilled technical personnel, a gap highlighted by the Directorate General of Civil Aviation’s (DGCA) ongoing efforts to fill nearly 55% of vacant technical positions.

The economic fallout is considerable. The report warns of a persistent outflow of foreign exchange that could otherwise be retained and reinvested domestically. Operationally, longer maintenance durations reduce aircraft availability, impacting airline productivity. From a strategic standpoint, reliance on foreign MRO services exposes India to potential disruptions amid geopolitical tensions or supply chain interruptions.

Challenges and Recommendations for Building Domestic Capacity

Beyond economic and strategic concerns, the committee underscored the detrimental effect of outsourcing on the development of a high-skilled, technologically advanced domestic MRO industry. The report asserts that establishing a robust local MRO sector is essential not only for import substitution but also as a cornerstone of national aviation self-reliance and security.

While the government has introduced measures such as reducing the Goods and Services Tax (GST) on MRO services from 18% to 5%, eliminating royalties for land allotments at Airports Authority of India (AAI) airports, and easing customs duties on toolkits, the panel found these steps insufficient. Persistent challenges—including taxation burdens, certification delays, and a lack of incentives for large-scale investment—continue to impede sector growth.

The committee cautioned that India risks forfeiting a “golden opportunity” to emerge as a regional MRO hub, despite advantages like a sizeable domestic fleet, strategic geographic location, and comparatively lower labour costs. It recommended a comprehensive policy overhaul encompassing tax rationalisation on imported aircraft parts, streamlined certification processes, and targeted fiscal and infrastructural incentives to attract investment.

Amid escalating security concerns, the report is expected to trigger closer scrutiny of outsourcing practices and potentially lead to stricter regulatory frameworks. Industry stakeholders may respond by investing in domestic training initiatives and forging partnerships to address labour shortages and enhance regulatory compliance, aiming to cultivate a more resilient and self-sufficient aviation maintenance ecosystem.