India's aerospace industry is being promoted as an offshoring base for foreign companies. According to Defense Minister Pranab Mukherjee, joint ventures that take advantage of India's low-cost engineering and science skills could cut development and marketing costs. He said, "[India is] keen to welcome international collaborations that are in conformity with our national goals."

Mukharjee added that India has the capability to make advanced alloys, process technologies and aircraft equipment. He said that the aerospace industry was also considering diversifying into making civil aircraft. At present, state-owned Hindustan Aeronautics Ltd (HAL) makes aircraft doors for Airbus. HAL will also manufacture 44 Hawk trainer jets that India is buying from Britain's BAE Systems Plc.

Opportunities have opened up between US companies and India's aerospace industry. Lockheed Martin has agreed to share data on its P-3 Orion surveillance aircraft with HAL, as India has been considering buying F-16 fighter jets from the US company. Additionally, Boeing Co signed up Indian software firm, HCL Technologies Ltd, to develop a hosting platform for the flight test system for its new 787 Dreamliner aircraft.

Dennys Plessas, regional vice-president of Lockheed's aeronautics unit said, "We are confident that integration of Indian industry such as HAL into our worldwide supplier base will enhance the attractiveness of our products to the Government of India."