• Wednesday, April 24, 2024

Business

The geopolitical implication of Air India’s mega aircraft deal with Airbus, Boeing

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By: Shubham Ghosh

The recent deal made by Air India to acquire hundreds of aircraft from aviation giants Airbus and Boeing is not only a feat limited to the world of business and economy but beyond it.

The order placed by the airline owned by India’s Tata Sons involves 470 aeroplanes — making it the biggest deal in the history of aviation shattering the American Airlines ordering 460 jets more than a decade ago.

The jumbo deal doesn’t mark the first time that Tata is doing business with Airbus and Boeing. The Tata Boeing Aerospace Limited, which is a joint venture between the Tatas and Boeing, has a cutting-edge facility in the southern Indian city of Hyderabad. It is the global source supplier for Apache fuselage and makes complex aero-structures for Boeing 737 and 777 models. Besides, the Tata-Airbus joint venture in Vadodara in the western state of Gujarat is set to make the C-295 transport military plane for India’s air forces.

However, the latest aircraft deal has a bigger goal to serve and it is geopolitical. World leaders such as US president Joe Biden, French president Emmanuel Macron and British prime minister Rishi Sunak have lauded the agreement. Biden has said that the deal would generate a large number of jobs in the US. Macron also thanked prime minister Modi for showing confidence in his country’s industry.

“This landmark deal between Air India, Airbus and Rolls-Royce demonstrates that sky is the limit for the UK’s thriving aerospace sector,” the UK premier said.

The move to order the huge quantity of planes from the western world helps India to balance out its friendship with Russia, which has come under the scanner of the international fraternity particularly after the outbreak of the war in Ukraine in February 2022.

New Delhi has been purchasing a significant amount of oil from Moscow despite the west imposing sanctions on the Kremlin. The move has not impressed the western world and Indian diplomats have been found facing sharp questions at various corners of the world and tackling them smartly.

There has been a pressure from the western world on India to tone down its oil purchase from Russia but the South Asian economy has resisted it.

In this background, the aircraft deal with western companies such as Airbus and Boeing gives India an opportunity to convey a message to the west that its foreign policy is a balanced one. Even India’s western policies are not without challenges. While the US wants India to include some of its top fighting jets in the Indian armed forces, New Delhi has gone for the France-made Rafale.

Recently, the US brought some of its state-of-the-art fighter aircraft at India’s Aero India 2023 show in Bengaluru and for many, these gave indications of the two countries getting closer on cooperation over military hardware. The presence of Russia, India’s time-tested military equipment supplier, looked rather pale in comparison.

While the US failed to get any aircraft deal with India, New Delhi’s decision to buy aeroplanes from both Europe-based Airbus and US-based Boeing in a balancing act between the western nations.

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