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This week's edition takes a look at India’s aviation market, German companies’ plans to invest in India, and more must-know news.

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India's aviation market is experiencing unprecedented growth. With passenger numbers jumping 2.4x since 2011, the country now ranks as the world's third largest aviation market, creating large opportunities for European businesses. This potential became even more apparent during the recent annual meeting of the International Air Transport Association (IATA) in Delhi, where India's major airlines announced numerous cooperations with international carriers.

With around 174 million passengers in 2024, India is the third largest aviation market globally after the United States and China. According to IATA’s report on India’s aviation market, this is around 2.4 times higher compared to 2011. Furthermore, the sector contributed USD 53.6 billion, or 1.5%, to India’s GDP in 2023 and supported 7.7 million jobs.

Thanks to continued investments in airport infrastructure and a growing middle class in India, this trend is expected to continue.

Number of Major Airports in India (2019 vs. 2033)

Infrastructure expansion is driving much of this growth. India has increased its operational airports from 74 in 2014 to 125 today, with ambitious plans to nearly double that number to 230 by 2030.

The infrastructure buildout creates multiple opportunities across the value chain:

Several European companies are well positioned to capitalise on these developments:

The most obvious beneficiaries are aircraft manufacturers. Expanding flight routes and connections, both domestically and internationally, require substantial aircraft fleets. Beyond foreign carriers, India’s local players plan to expand their fleets substantially:

To put this in perspective: Airbus targets to manufacture a total of around 820 planes in 2025 and can produce only 60 A350s annually due to limited production capacity for this model.

While Airbus is already highly successful and continues to strengthen its presence in India (see issues 11, 6 and 4), another European aircraft manufacturer considers entering the market. According to the Times of India, ATR - known for its turboprop models, aircrafts that utilise a gas turbine engine to drive a propeller - is reportedly targeting to sell 300 aircrafts in India over the next decade. As a joint venture between Airbus and Leonardo, ATR's entry would further support European leadership in India's aviation expansion.

India's aviation sector provides opportunities for a variety of European businesses. With growing domestic demand, international connectivity needs, and substantial infrastructure investments, European businesses can expect even more opportunities to emerge in this dynamic market.

Sources: IATA, MSN, Flightplan

German companies are waking up to India's potential. According to a survey by KPMG and the Indo-German Chamber of Commerce, a record number of German businesses plan to invest in the world's fastest-growing major economy, driven by geopolitical shifts and a growing recognition that Indian competitors could soon surpass them.

The survey report describes two primary drivers for the change in focus:

However, this opportunity comes with a growing sense of urgency. Nearly half (47%) of surveyed German companies expect their Indian competitors to become superior within five years, a striking acknowledgment of India's rapidly advancing business capabilities.

This competitive pressure is driving accelerated investment timelines. The survey shows a dramatic shift in German corporate planning:

These numbers represent a change from Germany's traditional China-focused strategy, as companies scramble to establish meaningful presence in India before competitive advantages erode.

Interestingly, German companies are rethinking their India entry strategy. Historically, German businesses, particularly small and medium enterprises (SMEs), entered India through sales offices, later adding manufacturing capacity. Today, they're considering a different approach: Global Capability Centers (GCCs). GCCs are offshore centres that handle high-value functions like innovation, digitisation, and advanced technology development for global corporations internally. 22% of the surveyed German companies operate GCCs in India, with 42% planning to expand these operations by 2030.

This shift is particularly significant because GCCs focus on cutting-edge capabilities – digital transformation, artificial intelligence, robotics, and Industry 4.0 applications – areas where India has strong ecosystems. European, US, and East Asian companies already leverage Indian GCCs for these functions, and German companies are recognising they cannot afford to lag behind.

The strategic realignment confirms a broader moment of recognition by German businesses that we had already covered in issue 2. If you want to understand the GCC landscape better, I’d recommend you checking out some of our past articles including “BOT? GCC? Outsourcing?” and “The New York Times' Spotlight on India's Tech Rise”.

Sources: KPMG, Indo-German Chamber of Commerce, Zinnov

Coming August, the EU-India IDEATHON for plastic-free marine ecosystems will open.

The IDEATHON is targeted for startups, researchers, businesses, and sustainability enthusiasts from the EU and India to co-create solutions that can track, remove, and prevent marine plastic pollution.

You can find more details and can express your interest in participation here.

Your random facts and stories about India and the Indo-European friendship.

This week: the World's First Official Air Mail by Airplane took place in India in 1911

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