India Wants MSMEs in Aerospace. It Also Just Built Them a Workshop.

Two announcements this week, when viewed together, reveal where India wants its MSME sector to go next: aerospace and advanced manufacturing.

At the CII conference VORTEX 2026 in Delhi, Civil Aviation Minister Kinjarapu Ram Mohan Naidu said India's aerospace and defence market could nearly double from more than $30 billion in 2025 to $61 billion by 2035.

His message was clear: MSMEs need to be part of that growth, rather than leaving the opportunity only to large defence contractors.

On the same day in Bengaluru, the Ministry of MSME inaugurated a ₹156 crore Technology Centre focused on electronics manufacturing and precision engineering—the very capabilities smaller companies would need to enter aerospace supply chains.

One announcement outlined the opportunity. The other provided infrastructure to help businesses pursue it.

India's Aerospace Opportunity Is Getting Bigger

The scale of the potential market is significant.

India's commercial aviation fleet is expected to more than double to approximately 2,050 aircraft by 2035. Indian airlines already have an order book of around 1,640 aircraft with manufacturers.

According to the figures presented at VORTEX 2026, this could translate into demand for nearly 80 crore individual parts and components over the period.

Passenger traffic is also projected to grow at around 8.9% annually through 2035, while India's aviation infrastructure has expanded rapidly.

The number of operational airports has increased from 74 in 2014 to 166, while the country's aircraft fleet has grown from around 350 to nearly 874 over the same period.

For Indian manufacturers, that expansion creates opportunities far beyond aircraft assembly and airline operations.

The Goal Is More Than Assembly

Naidu's pitch went beyond simply increasing India's role in the aviation supply chain.

The government wants Indian companies to develop the capability to design, manufacture and supply aerospace components, rather than remaining dependent on parts designed and certified elsewhere.

That could open opportunities for MSMEs already working in areas such as:

• Electronics manufacturing

• Precision engineering

• Avionics

• CNC machining

• Component manufacturing

• Advanced materials

• Prototyping

The approach is similar to the growth seen in India's automotive components and mobile phone manufacturing sectors, where smaller suppliers gradually became part of much larger supply chains.

There is already evidence that Indian supplier capabilities exist.

Boeing's India president Salil Gupte said the company works with around 300 Indian supplier partners, with MSMEs accounting for roughly a quarter of that network.

The challenge now is to replicate and scale those capabilities.

The ₹156 Crore Technology Centre in Bengaluru

This is where the new Technology Centre in Bengaluru becomes particularly relevant.

Spread across 10 acres provided by the Karnataka government at Devanahalli, the centre focuses on Electronics System Design and Manufacturing (ESDM) and advanced manufacturing capabilities.

For MSMEs, its infrastructure includes access to technologies such as:

• Surface Mount Technology (SMT) lines for circuit-board assembly

• 5-axis and 3-axis CNC machines

• Electrical Discharge Machining (EDM)

• Additive manufacturing

• Testing laboratories

• Technical advisory support

This can address one of the biggest barriers facing smaller companies considering entry into aerospace manufacturing: the cost of acquiring advanced equipment before knowing whether the opportunity will work commercially.

An electronics or precision-engineering MSME exploring avionics, for example, can potentially use such infrastructure to develop and test prototypes without immediately investing in an entire advanced manufacturing setup.

MSMEs Are Already Becoming Bigger Exporters

The aerospace push also comes as India's MSME export base expands.

According to figures cited at the event, MSME exports increased from around ₹4 lakh crore in 2021 to ₹12.4 lakh crore in 2025.

More than 1.73 lakh MSMEs are now directly involved in exports.

Aerospace and defence components, however, represent a different level of technical complexity and quality requirements compared with many products currently exported by MSMEs.

That is why initiatives such as VORTEX 2026 are focused not only on identifying potential suppliers but also on helping businesses understand aerospace certification standards, quality requirements and industry processes.

What MSMEs Need to Do Next

The opportunity does not mean that any manufacturing business can immediately become an aerospace supplier.

Aerospace manufacturing demands high levels of:

• Precision

• Quality control

• Technology

• Certification

• Skilled manpower

• Process consistency

As Naidu emphasised, MSMEs will need to invest in technology, quality systems and skills to meet these requirements.

For a precision-engineering or electronics MSME, however, the timing is notable.

India is simultaneously signalling a larger aerospace market and expanding access to infrastructure that can help smaller manufacturers experiment, prototype and develop the capabilities required to participate.

There is no simple subsidy application that automatically turns an MSME into an aerospace supplier.

But for businesses willing to invest in technology and quality, India's growing aircraft fleet, expanding component demand and new manufacturing infrastructure could make aerospace one of the more interesting high-value opportunities for India's next generation of MSMEs.