Airbus and Rolls-Royce have signed a contract valued at GBP 5 billion to supply aircraft and engines to Indian airlines. The agreement, announced on Thursday, forms part of a broader commercial initiative involving 26 UK-based companies expanding operations in India under the ongoing India–UK Free Trade Agreement (FTA) negotiations.
Over half of the Airbus aircraft in the deal will be equipped with Rolls-Royce engines, primarily the Trent XWB model. The agreement is expected to support manufacturing operations at various UK sites, including Filton and Broughton for Airbus, and Derby for Rolls-Royce.
The deal comes amid continued supply chain constraints in the aerospace sector, with industry analysts warning that such disruptions could affect delivery timelines. The order is also expected to intensify competition in the Indian aviation market, where Boeing is expanding its deliveries. Akasa Air, for instance, has announced plans to grow its fleet with additional Boeing 737 MAX aircraft.
Investor response to the deal has been mixed. Some view it as a strategic move to deepen Airbus and Rolls-Royce’s presence in India, while others have expressed concerns over the logistical and financial challenges of executing a large-scale supply agreement.
The India–UK FTA aims to boost bilateral trade to USD 120 billion by 2030 by reducing tariffs and encouraging investment. As part of this initiative, International Aerospace Manufacturing Private Limited (IAMPL), a joint venture between Rolls-Royce and Hindustan Aeronautics Limited, is investing GBP 30 million to expand its engine component facility in Hosur.
Other UK-based companies have also announced India-focused investment plans. Carbon Clean will invest GBP 7.6 million in a new Mumbai office. Medical device firm Occuity has secured a GBP 74.3 million export contract with Remidio Innovative Solutions. Johnson Matthey has won contracts worth over GBP 20 million, while the Marcus Evans Group plans to open a Mumbai office backed by an export and investment pipeline worth GBP 69 million over five years.
Airbus designs and manufactures civil and military aerospace products, while Rolls-Royce is a UK-based engineering company that develops power systems for aviation and other sectors.