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LE BOURGET, France (Reuters) - Indian airlines starred at the Paris Air Show Tuesday, accounting for over half of the $13 billion of jet deals carved up between U.S. group Boeing Co. and European arch-rival Airbus.

The orders highlighted growing demand for air travel in India, China and the Middle East, which aerospace executives hope will power a rebound in global aircraft manufacturing that began last year, following its deepest recession.

Boeing is set to regain the lead in commercial jet orders this year for the first time since 2000, but sales at the world's largest air show are helping Airbus gain ground, with India adding to the event's $18 billion of deals Monday.

"India is today one of the world's most promising markets," John Leahy, chief commercial officer at Airbus, said.

"More people in India travel by train in a day than travel by air in a year," he told a news conference.

Indian airlines have been modernizing their fleets and expanding as their government has deregulated a sector once strait-jacketed by red tape. India's government said in May it expected airline industry growth to surge 20 percent a year.

India's largest domestic airline Jet Airways said Tuesday it had committed to buy at least 20 Boeing planes worth over $2.8 billion at list prices, including 10 wide-bodied 777s that it will use to boost international service.

Jet said separately it would buy 10 Airbus aircraft with options to buy 10 more in a deal worth about $1.5 billion.

In addition, Jet's domestic rival Kingfisher Airlines said it planned to spend about $2.5 billion for "multiple wide-bodied aircraft" from Airbus, including its mammoth 555-seat A380 model, the world's biggest airliner.

"China and India could be the drivers of growth in the future," said Airbus chief executive Noel Forgeard.

"In Europe the trend is good, it is excellent in the Middle East, and it's even better in Asia."

MID-SIZE BATTLEGROUND

In a key battle ground between Airbus and Boeing, Kuwait-based aircraft leasing firm ALAFCO said it would buy 12 of Airbus's planned A350 mid-sized planes and take options on six more.

Airbus, owned 80-percent by European aerospace group EADS and 20 percent by Britain's BAE Systems, is seeking enough buyers to convince its board to approve production of the A350, which would begin deliveries in 2010.

But it faces tough competition from Boeing, which announced $4 billion of deals with aircraft leasing firms International Lease Finance Corp and GE Commercial Aviation Services.

These deals did not include Boeing's new mid-sized 787 plane, due in 2008, which has amassed over 260 commitments from customers so far and has left Airbus scurrying to catch up with its A350 program.

But Tom Pickering, a former U.S. ambassador who now spearheads Boeing's diplomatic efforts, told Reuters that the 787 was still going strong.

"We have momentum, the 787 is doing very well and we have another 450 deposits and high-level commitments," he said in an interview on the sidelines of the air show.

Orders or commitments received for the A350 so far reached 102 by the second day of the Paris air show and Airbus said it expected to have 200 commitments this year.

Forgeard forecast 360 total Airbus plane deliveries in 2005 and "at least" 400 next year as the airline sector recovers from its worst recession that began in 2001 and ended around the middle of last year.

TRADE FEUD

Airbus parent companies EADS and BAE Systems last week delayed giving final approval to build the A350 until September. The move coincided with reports that Airbus faced congestion on all its major projects including the A380, the world's biggest airliner, which has been delayed six months.

Forgeard denied this and -- for the first time -- linked the decision to delay a final go-ahead for the A350 to negotiations between European Union and the United States over aircraft subsidies at the World Trade organization.

He said the delay was a "contribution" by Airbus to help clear the atmosphere at talks over mutual allegations of illegal subsidies, but that Airbus would build the plane anyway if no progress were made. He said the EU had not asked for this.

Airbus specialists involved with the program said the A350 delay was purely industrial, however.

"We do have a shortage of engineers. But we are moving them from one program to another in an organized way," said Colin Stuart, Airbus Vice-President of Marketing.

Analysts say Airbus needs more time to finalize the 4.5 billion euro ($5.5 billion) project but may also have an interest in cooling the row with the United States partly in order to smooth its efforts to enter the U.S. military market.

(Additional reporting by Tim Hepher, James Regan, Jean-Michel Belot and Benoit Van Overstraeten in Le Bourget, and Rina Chandran in Bombay)

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