European aerospace major Airbus is exploring an ATR assembly line in India, right after Embraer’s E175 manufacturing push. This comes at a time when India has laid ground for its renewed regional connectivity
push with UDAN 2.0. What began as an effort to make flying affordable and accessible to Tier-2 and Tier-3 cities has quietly evolved into a powerful demand engine, one that global aircraft makers are now rushing to tap into.
Airbus And Embraer’s Plans For India
According to reports, Airbus, through its ATR partnership, is now exploring the possibility of setting up a final assembly line for ATR turboprop aircraft, its regional aircraft which is a 78-seater, in India, signalling a potential expansion of its civil aviation footprint in the country. While still at an exploratory stage, the move is aimed at aligning production closer to one of ATR’s largest and fastest-growing markets, where demand for short-haul regional aircraft is rising steadily under schemes like UDAN.
Airbus already has a significant manufacturing foothold in India through its partnership with Tata Advanced Systems, centred around the C295 military transport aircraft. The company has its aircraft final assembly line (FAL) in India at Vadodara, Gujarat, where 40 of the 56 C295 aircraft ordered by the Indian Air Force will be assembled domestically. This facility marks a milestone as Airbus’s first full aircraft assembly line in the country, with more than 85 per cent of structural assembly and thousands of components being produced locally, signalling a deep transfer of manufacturing capability.
In addition, Airbus and Tata are expanding this footprint into helicopters with a separate assembly line for the H125, underlining a broader push to build an integrated aerospace ecosystem in India rather than just a single project.
Meanwhile, Embraer’s India strategy is centred on building not just a factory, but a full-fledged regional aviation ecosystem anchored around its E175 jets. The company is exploring a final assembly line in India, but has made it clear that this will depend on securing a critical mass of domestic orders — around 200 aircraft — to make the investment viable. In the interim, Embraer is also considering a phased approach, starting with a completion centre for finishing and customising aircraft before moving to full-scale manufacturing.
How UDAN Has Changed Indian Aviation Market
For years, India’s aviation growth was driven by metro routes, dominated by large narrow-body aircraft. Regional routes were thin, often unviable, and largely ignored. UDAN changed that equation by subsidising routes, lowering operational costs for airlines, and opening up dozens of smaller regional airports.
The result has been a steady rise in demand for smaller, fuel-efficient aircraft capable of operating short-haul routes with lower passenger loads. This is precisely the segment where turboprops like ATR and regional jets like Embraer’s E175 thrive.
Industry estimates suggest India could require hundreds of regional aircraft over the next two decades as connectivity deepens. That kind of long-term visibility is exactly what manufacturers need before committing to local production.
As UDAN enters its next phase, with plans for more airports, helipads, and expanded connectivity, the implications go beyond passenger numbers. UDAN 2.0 aims to develop 100 new airports by upgrading unserved airstrips over the next decade, while also addressing last-mile connectivity through the construction of 200 modern helipads, especially in hilly, remote and aspirational regions. It shifts the focus from simply adding routes to building a comprehensive regional aviation ecosystem, combining airport infrastructure, airline viability and last-mile access into a single long-term strategy.
More routes will mean more aircraft. More aircraft will strengthen the case for manufacturing. And manufacturing, in turn, will anchor long-term industrial growth. Therefore, India’s regional aviation push is no longer just about flying more people to more places. It is about reshaping the economics of the aviation industry itself.
This is why Airbus and Embraer are not just watching India, they are preparing to build in it.
