The Indian aviation landscape has undergone a significant transformation over the past years. The number of airports in the country has more than doubled from 74 in 2014 to 159 at present. This rapid growth has been driven by increasing demand for air travel, rising income levels and concerted efforts towards infrastructure expansion. Airport projects have evolved over the years to incorporate advanced construction techniques and enhance the passenger experience. Additionally, dynamic market trends have shaped the airline industry, with existing players strengthening their position, new players entering the market and a few exiting. Meanwhile, the rising aircraft fleet is opening up opportunities in areas such as maintenance, repair and overhaul (MRO), and domestic aircraft leasing, financing, and manufacturing. These developments highlight the sector’s ongoing transformation and its alignment with the country’s broader economic and development goals.
Government support and policy landscape
Several government policies are driving the growth of India’s aviation sector. One of the key initiatives, the Regional Connectivity Scheme Ude Desh ka Aam Naagrik (RCS-UDAN), was launched in 2016 to improve regional connectivity. As of January 2025, 619 routes have been operationalised under the scheme. The scheme has also facilitated the operationalisation of 88 unserved and underserved airports, including 13 heliports and two water aerodromes. Moreover, over 14.8 million passengers have benefited from more than 0.29 million flights. Building on this success, the Union Budget 2025-26 has proposed a modified UDAN scheme, under which regional connectivity will be enhanced to 120 new destinations.
In the past year, several legislations and guidelines have been introduced to strengthen the sector and promote its overall development. A key development was the passage of the Bharatiya Vayuyan Adhiniyam 2024 by the Rajya Sabha in December 2024. This legislation replaces the Aircraft Act, 1934, aiming to strengthen the sector and align it with global standards. Further, the Protection and Enforcement of Interest in Aircraft Objects Bill, 2025 was recently introduced in Parliament to recognise international treaties on the resolution of disputes related to aviation asset recovery.
The government has also taken proactive steps to support the development of emerging modes of urban mobility. In September 2024, the Directorate General of Civil Aviation (DGCA) issued guidelines for vertiports for vertical take-off and landing (VTOL) aircraft, and released an advisory circular for the airworthiness criteria for their type certification. Apart from this, in August 2024, guidelines for seaplane operations were launched to increase their use in aviation under the non-scheduled operator framework.
The Ministry of Civil Aviation has received an allocation of Rs 24 billion under the Union Budget 2025-26. Meanwhile, state budgets have also allocated funds for new and existing airport projects. The recently approved Madhya Pradesh civil aviation policy focuses on the development of new airports and heliports at accessible distances, and promoting domestic and international connectivity through incentives, among others.
Expansion of airport infrastructure
The number of airports in India has more than doubled in the past decade, accompanied by a significant increase in passenger and cargo handling at these facilities. Indian airports handled a total of over 340 million passengers during April 2024-January 2025, a growth of over 9 per cent over the same period in the previous year. During the same period, the total freight handled witnessed a sharp increase of almost 13 per cent to exceed 3 million tonnes (mt). These traffic trends are driving the development of new greenfield airports, as well as the expansion and redevelopment of existing ones.
The trend of new airport inaugurations continued into the latter half of 2024. The revamped Solapur airport received its operational licence from the DGCA and was inaugurated in September 2024. Further, Rewa airport in Madhya Pradesh, Ambikapur Airport in Chhattisgarh and Saharanpur airport in Uttar Pradesh, developed under the RCS UDAN scheme, were inaugurated in October 2024. Further, civil works at Halwara airport have been completed and operations are likely to commence soon. The airport sector is poised for further growth, with new airports expected to be inaugurated soon. Airports including Amravati, Datia and Satna have received licences. Expansion of airports is also underway, including the inauguration of Terminal 1 at Jaipur airport in October 2024.
Upcoming projects
Several efforts have been made to initiate the construction of new projects. Foundation stones were laid for the expansion and upgrade of Varanasi airport, Kheria (Agra) Airport, Bagdogra airport, a new civil enclave at Darbhanga airport and a new integrated terminal building at Shirdi airport, Maharashtra. Apart from this, the GMR Group received approval to modernise and operate the Dr Babasaheb Ambedkar International Airport in Nagpur, Maharashtra, at an estimated investment of around Rs 70 billion. Work on the airport commenced in October 2024.
Apart from this, airports are expanding and improving existing facilities to increase capacities and ensure seamless operations. These include the construction of a new terminal building at Vijayawada airport and capacity addition at Chennai airport.
The ongoing construction of key greenfield airports has seen significant progress. The upcoming Navi Mumbai International Airport carried out the first commercial flight validation test on December 29, 2024, using an IndiGo A320 aircraft. With over 85 per cent of the physical progress achieved, the airport is expected to play a key role in the region. Further, the upcoming Noida International Airport has completed the calibration of its instrument landing system and the precision approach path indicator, and also received the calibration certificate. It witnessed the landing of its first validation flight, an A320 IndiGo, on December 9, 2024. Both airports are gearing up for inauguration and commercial operations soon.
Meanwhile, existing airports in Mumbai and Delhi are set to undergo significant upgrades. In Mumbai airport, T1 is expected to be demolished and redeveloped. Further, T2 at Delhi airport is expected to witness refurbishment works this year, aimed at enhancing capacities, with the newly developed T1 expected to balance passenger traffic.
A significant trend emerging in the sector is the establishment of dual-city airports. The Noida and Navi Mumbai airports are set to function as secondary hubs for the Delhi NCR and Mumbai Metropolitan region respectively. The upcoming airports at Bengaluru and Chennai are likely to serve a similar purpose.
The trend of airport expansion and development is expected to continue in the next few decades. The government plans to take the number of airports to around 350-400 by 2047.
Enhancing cargo handling capacity
As of 2023-24, airports had a total cargo handling capacity of 8 mt per annum. Various efforts have been made to increase this capacity. The country’s largest greenfield domestic cargo terminal in terms of design capacity was launched at the Kempegowda International Airport in Bengaluru in February 2025. The facility has a capacity of 0.36 mt, scalable to 0.4 mt, and features the latest technology. Further, while facilities like the cargo complex at Ahmedabad airport are expected to commence this year, upcoming greenfield airports at Hosur and Parandur are likely to feature cargo villages. Also, the upcoming Noida airport will include a multimodal cargo hub.
Changing stakes in airports
In the recent past, key airport stakeholders have increased their shareholdings in major airports. GMR increased its stake in the Delhi International Airport to 74 per cent by acquiring a 10 per cent stake from Fraport AG Frankfurt Airport Services Worldwide. Further, Fairfax India signed an agreement to acquire an additional 10 per cent stake in BIAL from Siemens Project Ventures, raising its stake from 64 per cent to 74 per cent, of which 30.4 per cent will be held by Fairfax India’s wholly owned subsidiary and 43.6 per cent by its subsidiary Anchorage Infrastructure Investments Holdings. The Airports Authority of India and the Karnataka State Industrial and Infrastructure Development Corporation will continue to hold a share of 13 per cent each in BIAL.
Sustainability and technology
In line with global trends, the Indian aviation sector has been focusing on the integration of sustainability initiatives to meet its net zero goals, as well as the adoption of new and advanced technologies to streamline operations and processes.
In the sustainability front, the sector has taken initiatives for integrating electric vehicles (EVs) into airports. The upcoming Noida airport has partnered with various companies for deploying EVs and charging infrastructure at the airport. Further, the Kempegowda International Airport, in collaboration with Refex eVeelz, increased its fleet of EV taxis by 170. Apart from this, Delhi Airport and Bengaluru airport received the net zero carbon emission airport status or Level 5 certification under the Airport Council International’s Airport Carbon Accreditation programme. The airports have reduced Scope 1 and 2 emissions by around 90 per cent and around 95.6 per cent respectively, and aim to achieve net zero Scope 3 emissions by 2050.
There is also a growing emphasis on sustainable aviation fuel (SAF). With indicative blending targets set initially for international flights, companies are exploring collaborations for the domestic production of SAF.
Technology has also revolutionised airport operations and enhanced passenger experience. DigiYatra has made notable progress since its launch, with the facility currently available at 24 airports, and set to expand even further. The Fast Track Immigration – Trusted Traveller Programme was launched at Delhi airport’s Terminal 3 to enhance immigration processes and extended to seven additional airports in January 2025, reducing wait times at passenger touchpoints and enhancing the overall experience.
Further, advanced construction technologies such as digital twins and building information modelling are being deployed for smooth construction and operations. GMR Hyderabad International Airport Limited launched an AI-powered digital twin platform with a next-gen airport predictive operations centre in December 2024, and expects to deploy this digital twin platform at all its airports soon. Other key initiatives adopted by airports include the use of robots, apps for passenger facilitation, technologies to improve aircraft landing and software to visualise overall airport processes.
Airlines
The airline industry has been experiencing dynamic market conditions over the past few years. The year 2024 witnessed the merger of Air India Express and AIX Connect, and Air India and Vistara. While two new airlines – Akasa Air and Fly91 – entered the market in recent years, existing airlines GoFirst and Jet Airways made an exit, with directions to be liquidated. Apart from this, new airlines including Air Kerala, Shankh Air and alhind Air are expected to commence operations in the coming years.
A notable trend in the segment is the rapid expansion of the aircraft fleet. Indian carriers have doubled their fleet in just about 10 years, now having a fleet of over 800 aircraft. With the recent mega orders placed by these carriers, the fleet is further expected to expand to over 1,400 in the next five years.
Others
The expected rise in aircraft fleet is set to create opportunities in allied sectors, with stakeholders already leveraging this opportunity. Demand for MRO services and facilities is increasing and is expected to rise further. While a significant portion of these services is currently outsourced, efforts are under way to develop domestic facilities. In September 2024, Air India commenced the development of an MRO facility in Bengaluru, featuring the latest aircraft maintenance technology. Further, Adani Defence Systems and Technologies (ADSTL) signed a share purchase agreement to acquire an 85.8 per cent stake in Air Works India (Engineering) Private Limited, a private MRO company in India. With this move, ADSTL aims to provide services for both commercial and defence aviation. Apart from this, Star Air has plans to enter the MRO segment through a joint venture.
The Gujarat International Finance Tec-City (GIFT City) has been making headway in aircraft leasing and financing. It provides opportunities for players to enter the segment, while also driving the creation of a competitive and supportive aircraft leasing hub. In terms of aircraft manufacturing, works are under way for the creation of a special purpose vehicle for regional transport aircraft manufacturing. Apart from this, companies like Airbus and GE Aerospace are planning to increase the sourcing of components from India.
Conclusion
India is one of the world’s fastest growing aviation markets, with airport development and expansions keeping pace with the rising demand for air travel. With the number of airports set to increase, the upcoming airport privatisations are likely to lead to interesting developments in the sector. The sector will also witness emerging opportunities in MRO, aircraft leasing and financing, and domestic manufacturing. Further, new modes of urban mobility such as VTOL, seaplanes and other advanced technologies such as drones are expected to create new avenues for investment.
