By Abhijith Ganapavaram

BENGALURU, Feb 10 (Reuters) - Boeing ( BA ) signalled on

Monday it would need more orders from India before it considers

setting up a final civil aircraft assembly line in the country,

potentially throwing cold water on the government's hopes of the

U.S. planemaker assembling commercial jets in the country.

"The business case in order to have final assembly in any

region has to be far larger than what the Indian market is. It

requires many more airplanes than are being bought in India

today," Boeing India and South Asia president Salil Gupte told

Reuters.

"We'll have to see how it evolves as the markets in India

and around India go. In the meantime, it is all about building

step wise capability to get up to that point," Gupte said in an

interview on the sidelines of the Aero India show in the city of

Bengaluru.

Early last year, Prime Minister Narendra Modi said India

will not have to wait too long for a Boeing ( BA ) that is designed and

manufactured in the subcontinent. The country's civil aviation

minister had told Reuters in 2023 that the time had come for

Boeing ( BA ) and Airbus to make civil aircraft in India.

Indian airlines, including Tata's Air India and IndiGo

, have about 1,800 aircraft on order with global

planemakers and are scheduled to take delivery of 130 jets this

year, according to data from UK-based Cirium Ascend.

Last week, Boeing ( BA ) said it expects Indian and South Asian

airlines will add 2,835 commercial aircraft to their fleet over

the next 20 years, a four-fold increase over current levels.

Gupte said final assembly was less than 10% of the value

proposition of an airplane, adding that the "real money" is in

everything else that is being done to get up to that stage.

Boeing ( BA ) sources products and services worth $1.25 billion

from India annually from a network of more than 300 suppliers,

according to its website. The company employs about 7,000 people

in the country.

The company's joint venture with India's Tata Group produces

AH-64 Apache helicopter fuselages and 737 aircraft vertical fin

structures for customers worldwide.

When asked about the challenges the supply chain faces,

Gupte said the Indian government needs to provide incentives to

suppliers to bring down the cost of capital in India to help

expand the aerospace supply chain.

"We had very candid conversations (with the civil aviation

ministry) and they are willing to take those conversations

forward" with other departments, he said.