Boeing Co. and Airbus SE are increasingly looking to India for highly-skilled, low-cost engineers to meet a boom in demand for aircraft and expand their manufacturing presence in the world’s fifth-largest economy.

Airbus plans to hire 1,000 people in India in 2023, out of 13,000 globally. Boeing and its suppliers, which already employ about 18,000 workers in the nation, have been growing by some 1,500 staff every year, the U.S. jet manufacturer’s India head Salil Gupte told Bloomberg News in an interview.

With about 1.5 million engineering students graduating annually, India is a rich source of talent for plane makers facing record orders from airlines as travel surges again after the COVID pandemic. Boeing can hire an engineer in Bengaluru, India’s southern tech hub, for 7% of the cost of a similar role in Seattle, according to salary data compiler Glassdoor.

The country has Boeing’s second-biggest workforce worldwide, Gupte said.

“Companies come to India for the incredible talent in innovation, not just in technology and software, but also in hard engineering and increasingly in manufacturing,” he said at the Aero India show in Bengaluru last month.

Alongside the hiring push, Boeing and Airbus are also establishing some production in India, which is pitching itself as a less politically fraught alternative to China.

Boeing signed a partnership with GMR Aero Technic Ltd. on March 10 to convert passenger jets to freighters in the southern Indian city of Hyderabad, where it already has a facility making vertical fins, which stabilize planes.

The plant, employing over 900 engineers and technicians, also produces Boeing AH-64 Apache helicopter structures, including fuselages for customers worldwide.

Airbus has also been touting India’s manufacturing prospects as it hires in the country. In October 2022, Prime Minister Narendra Modi attended a ceremony in his home state of Gujarat to mark the start of construction of a facility where Airbus Defence & Space SA and a unit of local conglomerate Tata Group will make C-295 transport aircraft for the Indian military.

The nation is an emerging market for sales, with the revitalized Air India Ltd. making a blockbuster order for 470 aircraft last month, split between the plane makers.

“The time is right for India to turn into an international hub,” Airbus chief executive officer Guillaume Faury said at the time of the aircraft order. “India is well on its way.”

A vast pool of educated, English-speaking talent adds to India’s appeal as a hiring ground.

Airbus employs more than 700 people at an engineering center in Bengaluru, and over 150 others in customer services there as well as in the capital New Delhi. India has a “unique ability” to support the company with its skilled manpower, an Airbus representative told Bloomberg, adding that hiring in the country was “not really” coming at the cost of jobs in other locations.

A Boeing representative said the plane maker leverages India’s talent for engineering, technology and research and development. The company has said it plans to hire 10,000 people globally in 2023, after adding nearly 15,000 in 2022, with a focus on engineering and manufacturing.

Still, the Seattle Times reported last month that Boeing will cut about 2,000 jobs, mainly in finance and human resources, but without specifying where. Some of those jobs are being outsourced to Tata’s consulting arm in India.

Gupte defended Boeing’s focus on India hiring, saying a bigger workforce there will help increase jobs in the U.S. Expanding manufacturing and innovation capabilities in the country will attract more customers and drive up demand for Boeing’s products, spurring employment, he said.

Boeing tests some of its latest manufacturing technologies in India before rolling them out in U.S. factories, which helps improve production efficiency, according to Gupte, who is based in Delhi.

Boeing said in February it is investing 2 billion rupees ($24 million) in a logistics park in India that will initially cater to local airlines and then a larger network of customers in the region. The plane maker will also set up a support center with dozens of employees for airlines near Delhi.

Companies have for decades looked to India to outsource jobs, from trade settlement to travel bookings. The country is home to about 40% of so-called global capability centers that provide tech, engineering and I.T. support, according to HSBC Holdings Plc. More recently, there’s been a shift to higher-skilled work for multinationals, including research and business development.

The availability of workers in India at “competitive global costs makes offshoring of certain production processes a very real possibility,” said Ravi Srivastava, director of the Center For Employment Studies at the Institute of Human Development in Delhi.

India is full of promising talent that can contribute to different sectors, but some additional training and skills are needed for certain niche manufacturing, said Sachin Alug, CEO at NLB Services near Delhi. Despite concerns about a recession, the hiring trend “is expected to continue for industries like aviation, which are picking new momentum in the country,” he said.

Israel Aerospace Industries, which has worked with partners in India for three decades on air and missile defense systems, drones, satellites and other equipment, is among companies in the sector joining the hiring spree. 

“I’m amazed by the talent you find here in India. We are hiring new talent all the time,” Danny Lauber, chief executive officer of Israel Aerospace’s India unit, said in an interview. “I have worked in many places around the world, but I haven’t seen such a strong universe of resources.”