Boeing Drops Manufacturing Plans in Bengaluru to Lack of Demand, Will Start R&D Hub

US aerospace giant Boeing is converting its entire facility in Bengaluru for research & development, putting off its plans to set up a manufacturing unit in India’s aerospace hub.

The state high level clearance committee (SHLCC) meeting chaired by Chief Minister BS Yediyurappa on Monday, 21 December 2020 approved Boeing’s request.

The firm decided not to pursue its manufacturing plans in Bengaluru in view of sedate demand for plans due to the Covid-19 pandemic. It had planned big ticket investments in Bengaluru, betting on a healthy demand for its planes in India, one of the fastest growing aviation markets in the world.

Two year ago, the state government had approved Boeing’s plan to set up an engineering and product development facility on a 36-acre plot in the aerospace park near the international airport with an investment of about 1,150 crore. The firm had said its Bengaluru project was going to be its second largest facility after the one in the US. The committee cleared five projects worth investments of about 26,659 crore with jobs potential of 13,341.

ABC Scheme launched

Meanwhile, Yediyurappa launched an affidavit based clearance (ABC) scheme as part of Karnataka’s ease of doing business (EoDB). The scheme will have 15 selected industry services from different departments, and manufacturing industries and other firms would be eligible for the affidavit-based clearance. They will be treated as government clearances for an initial period of three years or till the date of commercial operation.

“This is a historical decision taken to facilitate investments in the state,” industries minister Jagadish Shettar said.