India in talks with Embraer, Russia’s Sukhoi to make small planes locally

BLOOMBERG

India is looking to partner with global aircraft manufacturers, including Embraer SA and Russia’s Sukhoi, to make small planes locally as it seeks to improve connectivity in tiny towns and far-flung areas, according to people familiar with the matter.
The government will keep 51% equity with an Indian company, while asking the foreign partner to do technology transfer, the people said, asking not to be identified as the deliberations are at an early stage. The jets, which typically seat less than 100 people, are likely to be produced in PM  Narendra Modi’s home state of Gujarat, they said.
The world’s fastest-growing aviation market is trying to ramp up its small-plane fleet as airports with limited capacity and short runways are not equipped to handle narrow-body planes of Airbus SE and Boeing Co that dominate the Indian skies. This will help the government bolster tourism and facilitate faster access to remote areas in the South Asian giant of 1.4 billion, which recently has been seen to surpass China in population.
India mandates airlines operate at least 10% of their capacity on remote routes, including Kashmir and the Northeast bordering China, which means smaller planes could be more efficient for airlines as they can fill a larger share of total seats.
Airbus SE estimates India will need 2,210 aircrafts by 2040 and 80% of them will be smaller jets. The country has piqued global turboprop makers’ interest, with De Havilland Aircraft planning to seize 80% of its market for smaller planes of less than 20 passengers.
India has completed preliminary discussions with Embraer, while Sukhoi has expressed interest in manufacturing regional jets locally, the people said.
Embraer said India has “significant opportunities” for regional jets and the manufacturer “continuously looks for ways to collaborate with India to find win-win solutions”.