BERLIN (AFP) EADS, the parent company of Franco-German aircraft maker Airbus, may start producing in India in order to be nearer customers there, chairman Louis Gallois said on Tuesday.

"If we want to sell in India, we have to produce in India. There are lots of engineers in India," Gallois said at the Berlin Air Show. "India is a priority country."

India is guest of honour at the Berlin show, which started on Tuesday.

The biannual show, the third biggest in Europe after Farnborough, England and Le Bourget outside Paris, includes 1,100 exhibitions from 37 countries and 200,000 visitors.

Emerging economic giants China and India are fast becoming key markets for aerospace groups to tap into growing demand for both civilian and military hardware.

In February, Airbus' rival Boeing and India's Tata announced an agreement to to handle an initial 500 million dollars of defence-related aerospace component work in the country.

India, which has bought defence hardware worth 25 billion dollars since 1999, is expected to spend another 30 billion dollars by 2012 for the ongoing modernisation of its military.

Gallois also said Tuesday that he planned to travel to Airbus headquarters in Toulouse, France on Thursday amid Franco-German tensions over massive cost-cutting plans at the company, including the sale of factories.

"I shall be in Toulouse on Thursday to have contact with people because I can't accept bad statements through anonymous papers explaning things which are not true," Gallois said.

Airbus chief Thomas Enders played down the spat, saying: "You always find people unhappy about something. Today we may have some on the French side, tomorrow it could be Germans, British or the Spanish."