As India’s civil aviation industry continues to grow at a scorching pace, the homegrown Maintenance Repair & Overhaul (MRO) industry appears to have come to a screeching halt. It is a sad state of affairs as industry observers agree that Indian MRO capabilities have the potential to be one of the most competitive in Asia, especially due to the availability of a large and highly-skilled English speaking workforce that is also very cost competitive. Despite the emergence of a strong airline industry that could have provided an impetus to the MRO industry in India, more than 90 per cent of the MRO requirements of Indian carriers are performed out of the country.
“All Indian MROs are heading towards total closure due to highly beneficial tax policies for foreign companies that allow imports at 5 per cent tax and local MROs have to charge Goods & Services Tax (GST) @ 18 per cent. This gives a clear advantage of 13 per cent in reduced tax on imports for foreign MRO versus Indian MRO's. From the information we have, all Indian MROs have declared operating losses in their balance sheets for year ended March 31, 2017. If the Government continues to offer these massive subsidies for foreign companies, it is estimated that total and complete closure of Indian MRO will be successfully achieved by March 31, 2019,” warns Bharat Malkani, CEO of MAX Aerospace, a well-known aviation services company. In effect, according to Malkani, the combination