UDAN, But To Where?

DECODE THE NEWS

‘First, Do the Homework’ Say Experts As India Eyes Small Aircraft Manufacturing

What? 

Civil aviation minister Ram Mohan Naidu has big dreams for the future of India’s aviation industry. One of them is manufacturing aircraft in India. Naidu recently announced that the government has already set in motion steps to nurture the manufacturing of regional aircraft or small aircraft in India. Naidu announced that a special purpose vehicle (SPV) will be set up to make regional transport aircraft, a move that could place India on the global aerospace map. 

The government believes India is ready to take on design, manufacturing, and maintenance of aircraft, backed by policies already in place.  The SPV, which will unfold over the next five years and bring together industry stakeholders, conduct a situational analysis, and develop a roadmap for production, all under the ‘Make in India’ umbrella.

Can We Pull This Off? 

It would be good to remember that India is a country heavily dependent on foreign aircraft manufacturers, even for small planes. Regional aircraft typically have 30-90 seat capacity, fly distances under 1,000-1,500 km, like the ATR 72, De Havilland Dash 8, or the upcoming HAL-developed aircraft like the Hindustan 228 and the 70-seater RTA-70.

While India isn’t completely new to aircraft manufacturing — Hindustan Aeronautics Limited (HAL) assembling Dornier aircraft decades ago — India has not kept pace with global leaders in the space. Currently, the Indian regional aircraft market is dominated by European manufacturer ATR, with 67 aircraft operating in the country. IndiGo operates 45 of those. 

Experts The Core spoke to believe that India should not jump in without solid data, clear demand forecasts, and real industry buy-in.

“The ministry has to conduct a thorough analysis: How many aircraft are required? What kind? What’s the lead time for manufacturing? And who will manufacture — private players, HAL, or a consortium? There's also the question of maintenance, spares, and long-term support," Jitender Bhargava, former executive director of Air India, told The Core.

BUILD ON BLOCKCHAIN

Smart Contracts: The New Code Word

You reach the airport and come to know that your flight is delayed because of a technical snag. The airline says “sorry for the inconvenience.” You know you’re going to be late. 

But you’re not worried as the trip is covered by insurance. You reach the insurer for a claim, and it asks you to upload the boarding pass, airline confirmation and passport scan. And then you wait. A week later, you send a reminder. And then you wait. You get paid after a while, but not before you’re asked to send a clearer copy of your documents. 

Now, let’s look at the same event playing out in a parallel dimension. The airline updates the delay. The insurer automatically picks it up from the flight data feed. Your payout hits your account before the boarding gate opens. 

Could this smooth experience be our reality as well? Well, of course, but only if we adopt Smart Contracts.

What’s So Smart About It?

A smart contract is a bunch of code written on a blockchain which executes as soon as certain conditions are fulfilled. 

For example, you embed in the code a simple message, ”Pay the delivery person only if goods reach a good condition.” While you relax, the contract is active like an alarm. It waits, checks, and if goods arrive just fine, boom—payment is done. No middlemen. No fine print. 

What are other such use cases of smart contracts? 

This series is brought to you in partnership with Algorand. 

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CORE NUMBER

$21.54 billion

That’s India’s trade deficit for March 2025—sharply wider than the $14.05 billion recorded in February, which was the lowest in over three years. According to new government data, exports grew marginally by 0.7% year-on-year to $41.97 billion, but imports surged 11.4% to $63.51 billion, widening the gap significantly. The number also exceeded Bloomberg’s economist forecast of $15.5 billion. The rise comes as Indian exporters scramble to navigate the ongoing tariff uncertainty unleashed by US President Donald Trump, with calls growing louder for New Delhi to fast-track a bilateral trade agreement with Washington.

— 🇮🇳🇺🇸 India-US Sign Trade Deal. India and the US signed the terms of reference for the first part of a bilateral trade deal on Tuesday. The deal’s details aren’t public yet but The Financial Express reported that India could be cutting tariffs for half of American exports to India, worth $23 billion in total. Previously, US President Donald Trump called India a ‘tariff king’ and asked it to lower import duties on American-made Harley Davidson bikes and whiskey. In the past two weeks, Trump announced and later rescinded reciprocal tariffs on several countries, including India. The US and India have been in talks about a bilateral deal for some time now, but India appears to have rushed to sign this deal because of the looming threat of American tariffs. 

—🚗 Auto Sales Shift Gears. India’s passenger vehicle sales hit a record high of 4.3 million units in FY25, up 2% from last year, driven by strong demand for utility vehicles, which made up 65% of total passenger vehicle (PV) sales, data from the Society of Indian Automobile Manufacturers (SIAM) showed. Two-wheeler sales also bounced back, growing 9.1% to 19.6 million units, led by scooter demand in rural areas. EVs crossed 6% of all two-wheeler sales, and exports jumped 21.4% on rising demand from Africa and Latin America. Despite the inventory pile-up and cautious consumer spending throughout, the year closed strongly due to festival demand and competitive launches from manufacturers.

— 🥦🍅 Inflation At All-Time Low! ​India's retail inflation (CPI) eased to a five-year low of 3.34% in March 2025, according to the Ministry of Statistics and Programme Implementation, a relief for industries and consumers alike. The rate dropped primarily because of a significant drop in food inflation (CFPI) — a reduction in the prices of vegetables, eggs and pulses contributed to that fall. For the average consumer, this means lower grocery bills and potential relief from rising food costs. The country’s WPI dropped too, because of a drop in the prices of food and fuel and power, though manufactured goods became more expensive. The Reserve Bank of India (RBI) anticipates inflation to average around 4% in FY26, assuming normal monsoon conditions. 

—🌧️ Rain Check, Again? Speaking of monsoons, the India Meteorological Department (IMD) has forecast an ‘above normal’ southwest monsoon for 2025, predicting rainfall at 105% of the long period average (LPA). This echoes IMD’s optimism last year—2024 saw an 8% surplus. But in 2023, the agency blamed weak monsoons for stoking food inflation. This year, with a neutral El Niño, a stable Indian Ocean Dipole, and less snow cover up north, the IMD expects better rains. This raises hopes for higher kharif output, improved rabi sowing, and refilled reservoirs

PODCAST

On Episode 558 of The Core Report, financial journalist Govindraj Ethiraj talks to Pawan Kumar, President of Seafood Exporters Association of India as well as Aditi Nayar, Chief Economist, Head - Research & Outreach at ICRA.

• India beats tariff tantrums, becoming first global market to do so

• Morgan Stanley cuts December Sensex target to 82,000, still 7% above current

• Inflation is down to 5 year low, will it hold?

• The International Energy Agency joins OPEC in slashing oil demand forecasts

• How tariff tussles are have upended the lives of India’s shrimp and seafood exporters

• And our new segment on blockchain in partnership with Algorand

👥 THE TEAM

✍️ Zinal Dedhia, Salman SH, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas