# Aerospace and defence and Vehicles, ships, rail, aircraft Aircraft, warships and armoured vehicles sit in both industries, so the two share factories, suppliers and bottlenecks: aerospace and defence spends about ₹38.8 of each ₹100 of output with the vehicles industry, and engine and parts shortages have left a backlog above 17,000 aircraft. Source page: https://www.materialinsights.org/links/aerospace-and-defence-and-vehicles-ships-rail-aircraft/ [Aerospace and defence](https://www.materialinsights.org/industries/aerospace_defence/) (industry) and [Vehicles, ships, rail, aircraft](https://www.materialinsights.org/industries/vehicles/) (industry): 5 relationships. ## How they are linked ### 1. Buys from *Physical flow · Strong · Aerospace and defence buys from vehicles, ships, rail and aircraft* In the input-output tables, aircraft, ships and their parts are classed as transport equipment, so defence and aerospace makers buying airframes, hulls, engines and subsystems show up as large purchases from the vehicles industry. - **₹38.8** of every ₹100 of aerospace and defence output, all rounds (India 2022) - **₹27** bought directly This is the largest inter-industry link between any two industries on the site, and much of it reflects the overlap in classification: aircraft and warship programmes buy assemblies from the same transport equipment sector. Monthly US producer price indices for the two barely move together (correlation of about 0.06), so the tie is in physical flows rather than prices. Sources: [OECD](https://www.oecd.org/en/data/datasets/input-output-tables.html); [Material Insights (World Bank, FRED, IMF data)](https://www.materialinsights.org/industries/aerospace_defence/price-links/) ### 2. Buys from *Physical flow · Medium · Vehicles, ships, rail and aircraft buys from aerospace and defence* Vehicle, rail, ship and civil aircraft makers buy parts, systems and engineering services from aerospace and defence suppliers. - **₹5.4** of every ₹100 of vehicles output, all rounds (India 2022) - **₹3.9** bought directly The flow is much smaller in this direction, about a seventh of the reverse flow, because most of what the wider vehicles industry makes needs little from aerospace and defence suppliers. Sources: [OECD](https://www.oecd.org/en/data/datasets/input-output-tables.html) ### 3. Shared supplier base *Physical flow · Strong · Both ways, through common component makers* Commercial airframers are counted in both industries, defence primes and shipyards build ships and armoured vehicles, and aerostructure suppliers serve aircraft and vehicle makers alike; the site rates this 5 of 5 for commercial airframers and for aircraft, ship and rolling-stock builders. - **5 of 5** criticality for commercial airframers and for aircraft, ship and rolling-stock builders - **4 of 5** criticality for defence prime contractors and shipyards Specialised suppliers of aerostructures, subsystems and components serve civil aircraft, defence and other transport makers, so demand from one side, such as a defence surge, competes for the same capacity as the other. Enterprise types that depend on it: - Aircraft, ship and rolling-stock builders: shared aero suppliers (criticality 5 of 5) Sources: [Material Insights](https://www.materialinsights.org/industries/aerospace_defence/materials/) ### 4. Engine and parts bottleneck *Shared risk · Strong · Supplier shortages delay aircraft for airlines and air forces* Aircraft makers depend on a few engine makers and certified parts suppliers that have struggled to keep pace with demand, so some airframes are finished before engines can be fitted. - **over 17,000** aircraft on order, almost 60% of the active fleet, December 2025 - **at least 5,300** aircraft delivery shortfall, December 2025 - **more than USD 11 billion** cost to airlines of supply bottlenecks in 2025, IATA estimate IATA reported newly completed airframes parked until engines arrive, and the average fleet age rising to 15.1 years. It does not expect supply to catch up with airline needs before 2031 to 2034, which keeps airline capacity tight. Sources: [Aviation and Defence Universe](https://www.aviation-defence-universe.com/aerospace-supply-chain-bottlenecks-continue-to-constrain-airlines/) ### 5. Military aircraft built in India *Policy · High in India · Defence orders seed Indian aircraft assembly* India has used defence orders to bring aircraft manufacturing into the country, with the C295 transport the first aircraft assembled on a private Indian final assembly line. - **56** C295 aircraft ordered by the Indian Air Force - **40** to be built at Tata Advanced Systems' Vadodara line, by August 2031 - **37** Indian suppliers onboarded Sixteen aircraft came fly-away from Seville, and the first Indian-built aircraft rolled out at Vadodara in May 2026, ahead of the September 2026 plan. A private plant and a domestic supplier base built for a defence order can also serve civil aerostructures, which is how defence orders spill into the wider vehicles industry. Sources: [Airforce Technology](https://www.airforce-technology.com/newsletters/tata-airbus-c295-aircraft-india/); [Business Today](https://www.businesstoday.in/bt-tv/whats-hot/video/historic-milestone-first-made-in-india-c-295-rolls-out-in-vadodara-ahead-of-schedule-531455-2026-05-14) ## For investors ### Key learnings 1. Aerospace and defence spends about ₹38.8 of each ₹100 of output with the transport equipment industry, partly because aircraft and ships are classed in both. 2. The binding constraint is supply, not demand: over 17,000 aircraft were on order in December 2025, and IATA does not expect supply to catch up before 2031 to 2034. 3. Specialised aerostructure and subsystem suppliers serve civil aircraft, defence and other transport at once, so a defence surge competes for the same capacity. ### What to track - **Airbus and Boeing deliveries against plan**: Shortfalls show where engine and parts bottlenecks bite (Monthly · Airbus, Boeing) - **Engine maker output and shop visit times**: Engines decide how many airframes can fly (Quarterly · GE Aerospace, Safran, Pratt & Whitney results) - **Aerostructure orders to Indian suppliers**: Shows India's growing share of the shared supply base (Quarterly · company results) ## For policymakers ### Key learnings 1. Defence orders such as the 56 C295s can build an aircraft assembly base, with 40 to be made at Vadodara. 2. Aircraft supply will stay tight until 2031 to 2034 by IATA's estimate, so domestic parts capacity has value for both airlines and air forces. 3. Narrow engine and certified parts supply is a shared risk for civil and military aircraft programmes alike, so supplier capacity is as strategic as final assembly. ### What to track - **C295 deliveries from Vadodara**: Shows whether local assembly meets schedule (Quarterly · Ministry of Defence, Tata Advanced Systems) - **Indian airline fleet deliveries**: Supply shortfalls limit air traffic growth (Monthly · DGCA) ## India India ordered 56 C295 transports, 40 to be built at Tata Advanced Systems' Vadodara line by August 2031 with 37 Indian suppliers, the first private aircraft final assembly line in the country; the first Indian-built aircraft rolled out in May 2026. ## Sources 1. [OECD Input-Output Tables 2025 edition, India 2022](https://www.oecd.org/en/data/datasets/input-output-tables.html), OECD 2. [Aerospace and defence: materials](https://www.materialinsights.org/industries/aerospace_defence/materials/), Material Insights (2026) 3. [Aerospace supply chain bottlenecks continue to constrain airlines (IATA)](https://www.aviation-defence-universe.com/aerospace-supply-chain-bottlenecks-continue-to-constrain-airlines/), Aviation and Defence Universe (2025) 4. [Tata and Airbus C295 aircraft in India](https://www.airforce-technology.com/newsletters/tata-airbus-c295-aircraft-india/), Airforce Technology (2024) 5. [Price correlation, Material Insights](https://www.materialinsights.org/industries/aerospace_defence/price-links/), Material Insights (World Bank, FRED, IMF data) 6. [Historic milestone: first Made in India C-295 rolls out in Vadodara ahead of schedule](https://www.businesstoday.in/bt-tv/whats-hot/video/historic-milestone-first-made-in-india-c-295-rolls-out-in-vadodara-ahead-of-schedule-531455-2026-05-14), Business Today (2026)