Boeing to invest $1.5 bn in India

The Boeing Company will invest $1.5 billion, directly and indirectly, in India as part of its $6-billion deal with Air-India for 68 aircraft.

The money will be spent on setting up facilities, research and development and sourcing software and other equipment.

Boeing will also set up an aircraft maintenance facility, which will be for $185 million, in association with Air-India.

"We are very bullish on the Indian market. We already have relationships with a variety of companies in the areas of aviation-related software development and back office," said Boeing chairman and chief executive James McNerney in Nagpur on Wednesday.

Boeing, which at present works with Wipro, Infosys, TCS and HCL Technologies, is looking at increasing the amount of work given to these companies.

It also plans to make use of the opportunities coming up in the defence sector. "With the changed relationship between India and the US, we are in a position to tap other opportunities in India," McNerney said. One of the purposes of his current visit is to understand the Indian defence market.

The government is in the process of finalising orders for 126 multi-purpose fighters and maritime patrol aircraft and helicopters. Both Boeing and its European rival, EADS, are in the fray. McNerney said he expected more orders from Indian airline companies.

"The year 2005-06 was a great year for us, mainly due to the Air-India order. This year will also be good, (though) may not be as good as last year," McNerney said.

In 2005-06, Indian carriers placed orders for over 100 aircraft with Boeing and about 300 with rival Airbus Industrie. McNerney said, "The traffic grew at 25 per cent last year and is expected to grow at the same rate in the future as well."

Boeing on Tuesday signed a $4.6 billion deal to sell 80 of its 737 aircraft to Chinese airlines.