BENGALURU, India: Boeing has indicated that it needs significantly more orders from India before considering setting up a final assembly line for commercial aircraft in the country, dampening government hopes of attracting production from the U.S. aerospace giant.

"The business case in order to have a final assembly in any region has to be far larger than what the Indian market is. It requires many more airplanes than are being bought in India today," said Salil Gupte, Boeing's president for India and South Asia, in an interview with Reuters at the Aero India show in Bengaluru.

He added that while India's aviation market is expanding, the company would need to see further growth across the region before making a decision. "We will have to see how it evolves as the markets in India and around India go. In the meantime, it is all about building stepwise capability to get up to that point."

Boeing emphasized in a statement that it remains firmly committed to India's aerospace sector. The company has previously offered to assemble defense aircraft such as its F/A-18 fighter jets in India. Still, it pointed out that commercial aircraft production requires much higher volumes to justify a dedicated assembly line.

Last year, Prime Minister Narendra Modi expressed confidence that India would soon see a Boeing aircraft designed and built in the country. Civil aviation officials have also pushed for Boeing and Airbus to manufacture planes domestically.

"As the market evolves, we continue to assess the feasibility of co-development and co-production opportunities when the time is right, ensuring we have a robust ecosystem to support them," Boeing said in its statement.

India's aviation sector has seen major aircraft orders in recent years, with airlines such as Tata-owned Air India and IndiGo placing orders for about 1,800 jets. According to data from UK-based Cirium Ascend, the country is set to receive 130 aircraft this year.

Boeing has projected that Indian and South Asian airlines will add 2,835 commercial aircraft over the next 20 years—a fourfold increase from current levels. However, Gupte pointed out that final assembly accounts for less than 10 percent of an aircraft's value and that the real economic opportunity lies in expanding India's aerospace supply chain.

Boeing currently sources US$1.25 billion worth of products and services from India annually through 300+ suppliers and employs 7,000 people in the country. Its joint venture with Tata Group manufactures AH-64 Apache helicopter fuselages and 737 vertical fin structures for global customers.

To strengthen India's aerospace industry, Gupte urged the government to offer incentives for suppliers to reduce the cost of capital, making the sector more competitive.

"We had very candid conversations (with the civil aviation ministry), and they are willing to take those conversations forward" with other departments, he said.