Aequs Group Signs MoU for ₹4,000 Crore Aerospace Cluster in Tamil Nadu

On February 16, 2026, Aequs Group, a diversified contract manufacturing firm, formally entered into a Memorandum of Understanding (MoU) with the Government of Tamil Nadu to establish a new Aerospace and Defence Manufacturing Cluster. The agreement outlines a major infrastructure project in the Krishnagiri district designed to bolster India’s capabilities in high-precision engineering.

According to the official announcement, the project carries a total investment potential of ₹4,000 crore (approximately $480 million) and aims to generate roughly 7,000 employment opportunities. This initiative marks a strategic expansion for Aequs, extending its operational footprint beyond its established base in Karnataka to the rapidly developing industrial corridors of Tamil Nadu.

Investment Breakdown and Infrastructure Plans

The MoU was signed by Aequs Chairman & CEO Aravind Melligeri and representatives from Guidance Tamil Nadu, the state’s investment promotion agency. The proposed cluster will be situated in the SIPCOT Industrial Park in Shoolagiri, Krishnagiri District. This location is strategically significant due to its proximity to the Karnataka border and the established Hosur industrial belt.

Financial Commitments

The press release details a structured investment plan over the next decade. Of the total projected ₹4,000 crore investment:

• Direct Investment: Aequs has committed to investing ₹1,900 crore directly into the facility over a 10-year period.
• Ecosystem Investment: The remaining ₹2,100 crore is expected to come from other partners and suppliers who will co-locate within the cluster.

The facility is designed to replicate Aequs’ “ecosystem” model, previously deployed in Belagavi. By offering plug-and-play industrial infrastructure, the cluster aims to support both Aequs’ own units and downstream suppliers, creating a consolidated supply-chain for global Original Equipment Manufacturers (OEMs).

Strategic Focus: Vertical Integration

A core objective of the new cluster is to host India’s first fully vertically-integrated aircraft engine manufacturing project. The scope of manufacturing outlined in the agreement includes aero-engine components, landing gear systems, and ultra-precision machining.

Tamil Nadu’s Minister for Industries, T.R.B. Rajaa, highlighted the significance of this development for the state’s industrial ambitions:

“This investment strengthens our place in global aero-engine supply chains and signals confidence in our infrastructure, skilled workforce, and policy continuity. It reflects the government’s approach towards distributed growth.”

The project aligns with the Tamil Nadu Aerospace & Defence Industrial Policy, which targets substantial job creation and investment inflows over the coming decade. By securing this deal, the state continues to position the Krishnagiri-Hosur region as a premier hub for advanced manufacturing.

AirPro News Analysis

This move represents a significant diversification for Aequs. While the company is headquartered in Belagavi, Karnataka,where it operates India’s first notified precision engineering SEZ,the decision to expand into Tamil Nadu suggests a strategy of leveraging regional strengths. The “Little England” region of Hosur offers a deep talent pool in automotive and engineering sectors, which is critical for the high-precision requirements of aerospace manufacturing.

Furthermore, the timing of the agreement coincides with other major investments in the region, such as the ₹1,980 crore MoU signed with Japanese firm MinebeaMitsumi on the same day. We observe that this clustering of high-value manufacturing units is likely to accelerate the development of specialized vendor bases in the Tamil Nadu-Karnataka border region, reducing logistics costs and lead times for global aerospace contracts.

Frequently Asked Questions

What is the total value of the investment?
The total investment potential for the cluster is ₹4,000 crore. Aequs will directly invest ₹1,900 crore, with the remaining amount expected from partners joining the ecosystem.

Where will the new cluster be located?
The facility will be built at the SIPCOT Industrial Park in Shoolagiri, Krishnagiri District, Tamil Nadu.

How many jobs will be created?
The project is projected to generate approximately 7,000 jobs over the course of its development.

What will be manufactured at this facility?
The cluster will focus on aero-engine components, landing gear systems, and advanced aerospace sub-assemblies.

Sources

Aequs Group Press Release