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Airbus is currently evaluating setting up a Final Assembly (FAL) line in India for ATR regional aircraft. This would be the first time the European manufacturer has indicated willingness to produce commercial turboprops on Indian soil, as first reported by The Times of India.
ATR is a 50-50 joint venture between Airbus and Leonardo from Italy. It has an established position in India through its customers, IndiGo, which operates 50 ATR regional turboprop aircraft, and Fly91, which operates six ATR regional turboprop aircraft, with more expected to operate this calendar year. The proposal is being driven simultaneously by India's scale as an aircraft buyer, its government's push for regional connectivity, and competitive urgency from Brazil's Embraer, which signed an MoU with Adani Group in January 2026 to explore a regional aircraft FAL in India.
This would not be Airbus's first assembly line in India. The company already operates two FALs through its partnership with Tata Advanced Systems Limited (TASL). The first, in Vadodara, Gujarat, assembles the C295 military transport aircraft. The second, in Karnataka, produces the H125 commercial helicopter, as per the reports of CH Aviation. In addition to these FALs, several other Airbus suppliers also have a presence in India, such as Dynamatic Technologies in Bangalore, producing doors for the A220 family of aircraft, and TASL, producing bulk/cargo doors for the A320 family of aircraft. According to Airinsight, all of Airbus's board members visited India for the first time personally in October 2025, which signals that the company views the country as an important part of its strategic growth.
This is ATR's first-ever indication it may assemble commercial aircraft in India ;every previous ATR discussion was about sales, not manufacturing sovereignty.
The ATR 72-600 seats a maximum of 78 passengers, can operate from runways as short as 1,050 metres, and was designed for the sub 400 nautical mile flight routes that combined make up more than 90 percent of inter-city trips made in the country of India. The aircraft is specifically designed to service those routes that mainline/major commercial jets cannot economically operate on.
However, there are two structural roadblocks Airbus is assessing prior to committing to India, according to The Indian Defence Research Wing (IDRW). Firstly, operational costs associated with operating airlines in India are high, including jet fuel, airport charges, and navigational fees, making it difficult to maintain regional routes once the Government's Viability Gap Funding (VGF) has ended. Secondly, the costs to acquire aircraft remain elevated. In addition, Airbus is investigating ways to achieve higher levels of component indigenisation in order to reduce dependency on imported products and achieve lower costs.
The government has approved a revised Regional Connectivity Scheme (RCS) worth ₹28,840 crore over 10 years (FY 2026–2036), with ₹100.43 billion in VGF for airlines. It targets 100 airstrip upgrades into operational airports. This policy framework directly supports the demand for ATR aircraft; however, according to the publication from CH Aviation, this demand is also creating dependency, and therefore will need resolution, in order for there to be a viable long-term FAL business case.
Nathalie Tarnaud Laude, CEO of ATR, speaking to Aviation Week Network (February 2026), observed
"We want to do a lot in India, and we are discussing a lot about this with our partners, airlines, and authorities. We will review everything."
Her statement came alongside ATR's target of at least 20% production growth in 2026 and a goal of 60 annual deliveries by 2030, after a difficult 2025 in which only 32 aircraft were delivered due to supply chain constraints. Half of ATR's firm order backlog of 205 aircraft is concentrated in the Asia-Pacific region, per Aviation Week, underscoring India's importance to the manufacturer's medium-term delivery plan.
According to IDRW, Airbus and IndiGo have entered into an order for 1,300 aircraft, representing a multi-billion-dollar commitment to purchase aircraft from Airbus. An ATR FAL in India would improve that relationship as well as reduce delivery lead time for regional airlines, contributing to the Make in India initiative. The business case for India is not about current volume; it is about where that demand lands.
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