India looking to partner with Sukhoi, Embraer to make small jets in country: Report

This is in line with the country’s efforts to enhance connectivity in remote regions and small towns.

The Indian government plans to retain a 51% equity stake in a joint venture with an Indian company while requesting the foreign partner to provide technology transfer, the report said quoting unnamed sources, who added that the negotiations are in the early stages, said the report.

The joint venture is expected to manufacture small jets with seating capacities of less than 100, and production facilities are likely to be set up in Modi’s native state Gujarat, it added.

India, which has the world's fastest-growing aviation market, is aiming to increase its fleet of small planes.

This will help the government to bolster tourism by ensuring connectivity to remote areas where airports with short runways are not fit for narrow-body planes of Airbus SE and Boeing Co. that form a chunk of the fleets of all airlines in the country.

The Indian government requires airlines to operate a minimum of 10% of their capacity on remote routes, including regions like Kashmir and the Northeast that border China. This creates an opportunity for smaller planes to be more efficient for airlines, as they can fill a larger proportion of the total available seats on these routes.

India has held initial talks with Embraer and Sukhoi regarding the manufacturing of regional jets. Sukhoi has reportedly shown interest in producing these planes domestically.

Additionally, India has approached ATR, which is a joint venture between Airbus and Leonardo SpA of Italy, to consider manufacturing planes in India, the Bloomberg report said.

The proposed initiative is a crucial component of Prime Minister Narendra Modi's efforts to promote manufacturing, increase economic productivity, and create employment opportunities in India, the report said.

The government is providing subsidies to airlines to make air travel more affordable, which is part of its strategy to improve last-mile connectivity.

As part of a regional connectivity initiative, India has allocated 45 billion rupees ($545 million) to upgrade 100 under-served airports, heliports, and water aerodromes. Furthermore, the government aims to open 1,000 new air routes by next year.