Good Morning. India wants to build small commercial planes. Not parts, not prototypes, but manufactured from scratch. Government signalling for this has never been louder, but aviation insiders believe that there are big gaps between India's ambition and its capability. Can India put together the depth of research, assembly and certification that even seasoned aviation manufacturing nations struggle with?

Indian benchmark indices declined on Monday, with the BSE Sensex closing at 84,900.71, losing 331.21 points or 0.39%. The NSE Nifty50 closed at 25,959.5, 108.65 points or 0.42% lower.

In other news, Reserve Bank of India (RBI) Governor Sanjay Malhotra said there is scope for a repo rate cut. Meanwhile, Hindustan Aeronautics Ltd (HAL) calls the Dubai Tejas crash an isolated incident.

DECODE THE NEWS

India Wants To Build Planes But Gaps Still Run Deep

By Zinal Dedhia

What?

When India’s Civil Aviation Minister K Rammohan Naidu said in Parliament earlier this year that India was “ready to design, manufacture and maintain aircraft,” it set off a ripple of excitement in the aviation sector.

Naidu said that the government was creating a Special Purpose Vehicle (SPV) to develop regional transport aircraft, small to mid-sized aircraft designed specifically for short-haul routes, typically connecting smaller cities, remote locations, and regional airports, and to cut India’s dependence on imported planes. India’s airlines and regional connectivity operators will be the immediate customers.

Despite excitement surrounding this measure, experts are posing an important question: Does India actually have the capability to make commercial aircraft?

“We need to build an entirely new ecosystem for aircraft manufacturing. Market forces—not just ambition—will determine what type of aircraft makes sense. A detailed technical and demand analysis is essential to identify the right size and segment to build,” Bharat Malkani, chairman of Max Aerospace and Aviation, told The Core.

Why?

The initiative led by the Ministry of Civil Aviation (MoCA) was driven by a combination of rapidly rising aircraft demand and the strategic risk of relying almost entirely on imports. Indian airlines have placed record orders — over 2,000 aircraft in the pipeline — making India one of the world’s fastest-growing aviation markets. Yet every aircraft, engine, and major system still comes from abroad.

Building commercial aircraft is a big leap India is attempting. It requires global certifications, deep supply chains, and unforgiving safety standards. Despite multiple attempts over decades, India’s commercial aircraft dreams have moved little beyond proposals and prototypes.

“When we talk about qualifications, infrastructure, supply chains, and an ecosystem, we simply do not have that for commercial aircraft. What has really changed? Demand has grown, certainly. But capability? That remains the real question,” a senior aviation veteran with 40+ years of experience in the industry told The Core on condition of anonymity.

For all the political excitement, India’s aviation insiders keep returning to the same reality: the country is trying to build a skyscraper without pouring the concrete.

India can make many metal parts and machined components, but building a commercial airliner needs hundreds of highly specialised suppliers — for engines, avionics, composites, landing gear, and certified testing. These vendors don’t exist in India yet at scale, so the supply chain is the biggest gap.

So will the aircraft manufacturing plan succeed this time?

CORE NUMBER

34.1%

That’s how much India’s finished steel imports fell year-over-year in the first seven months of FY2025, signalling a sharp slowdown in inbound steel demand, according to provisional government data reviewed by Reuters.

Why It Matters: Despite the steep drop, India — the world’s second-largest crude steel producer — remained a net importer, reflecting weak domestic demand and price pressures.

By The Numbers:

3.8 million tonnes of finished steel imported in April–October.

South Korea led with 1.4 million tonnes, followed by China, Japan and Russia.

3.5 million tonnes exported — up 25.3% YoY.

Finished steel output: 91.6 million tonnes; crude steel: 95.7 million tonnes.

Context: Domestic steel prices are under pressure from sluggish demand, oversupply and muted trade activity during the festival season.

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FROM THE PERIPHERY

HAL Calls Crash Isolated

Hindustan Aeronautics Ltd (HAL) said on Monday that last week’s Tejas fighter jet crash at the Dubai Airshow was an isolated incident caused by “exceptional circumstances,” without sharing further details, Reuters reported. The aircraft crashed during an aerial display, killing the Indian Air Force pilot, and a court of inquiry has been ordered to determine the cause.

Impact: The crash has raised doubts over export prospects and highlighted persistent delays and structural weaknesses in India’s defence manufacturing. The incident underscores the urgent need for faster modernisation and private-sector participation.

Background: Powered by General Electric (GE) engines, the Tejas is central to India’s plans to modernise its ageing fleet, and both HAL and GE will support the investigation. According to the reports, HAL said the incident will not impact business or deliveries, and its shares were steady after the statement.

Rate Cut Hopes

Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that India’s macroeconomic indicators remain strong, keeping the possibility of a repo rate cut open in the upcoming monetary policy meeting. “The data since October has not reduced the scope for a rate cut. There is still room, but the MPC will decide,” he told Zee Business, adding that the RBI aims to balance price stability and growth.

Context: Market expectations are already leaning toward easing. A recent Moneycontrol poll of economists and market participants indicated the MPC may cut the repo rate by 25 basis points in December, supported by multi-month low CPI inflation. If announced, it would be the first cut after the RBI held rates steady in August and October, following a cumulative 100-basis-point reduction between February and June.

Setting: Malhotra also commented on the rupee’s recent slide, calling the 3–3.5% annual depreciation “natural.” The currency hit a record low of 89.49 against the US dollar on November 21 amid foreign outflows and reduced RBI intervention.

NBFCs Maintain Momentum

India’s non-banking financial companies (NBFCs) are expected to post steady AUM growth of 18–19% this fiscal and next, pushing the sector past the Rs 50 lakh crore mark by March 2027, Crisil Ratings said in a press note. Consumption demand, GST rate cuts and easing inflation are set to support retail credit, though the pace will differ across asset classes based on risk and funding availability.

The Lead: Vehicle finance and home loans—each accounting for around 22% of NBFC AUM—are projected to grow 16–17% and 12–13% respectively, aided by strong auto sales and healthy housing demand amid heightened competition from banks. Growth in unsecured personal loans is forecast to improve to 22–25% after last year’s slowdown, while unsecured MSME loans are likely to weaken to 13–14% due to rising delinquencies.

Flashpoint: Crisil highlighted funding access as a key constraint, with bank lending to NBFCs stagnant at Rs 13.8 lakh crore. It said mid-sized NBFCs remain particularly vulnerable and must stay agile amid evolving risk and regulatory dynamics.

New iPhone Penalty Warning

Apple’s official distributors have warned Indian retailers of heavy penalties if newly purchased iPhones, especially from the iPhone 17 series, are activated with foreign SIM cards within 90 days, Moneycontrol reported. The move is aimed at curbing grey-market diversion of devices to high-profit markets like Russia, Africa and the Middle East, which is causing severe shortages in India.

Flashpoint: Retailers were told that fines may be imposed and store codes could be blocked if phones sold by them are activated abroad, though the penalty amount is unclear. Experts estimate 3–5% of iPhones are routed through unofficial export channels, with nearly half going to Russia.

What's Next? iPhone 17 stocks, especially 256GB and 512GB models, are rapidly disappearing, prompting Apple to cut cashback offers from Rs 6,000 to Rs 1,000. Retailers call the rules unfair and say parallel exports happen across large chains and online platforms. Apple expects supply to stabilise by December.

PODCASTS

US-India Trade Deal Roils Currency And Stock Markets

On Episode 734 of The Core Report, financial journalist Govindraj Ethiraj talks to Kunal Sodhani, Vice President, Shinhan Bank as well as Sachin Seth, Chairman of CRIF High Mark and Regional MD, CRIF India and South Asia.

• US India trade deal or lack of it roils currency and stock markets.

• Why did the RBI step back from currency markets last week?

• A global merger deal driven by a race for copper falls apart

• What are US CEOs saying about high import tariffs

• How Indians are shifting towards secured credit and bigger ticket loans

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