The Indian aviation industry has made significant progress over the past decade, driven by government initiatives, capacity expansion and positive developments in the airline segment. It is poised for further growth, with opportunities emerging across segments. At recent industry events, Kinjarapu Ram Mohan Naidu, Union Minister of Civil Aviation, highlighted the sector’s progress, emerging opportunities and future outlook. Edited excerpts…
India is today the world’s fourth-largest economy, with its GDP exceeding $4 trillion, and is poised to become the third-largest within the next three years. This growth momentum is powered by its financial and political stability. The country is also emerging as a strategic connector nation – a bridge between regions, economies and supply chains. Its strategic geographical position, abundant resources and vast human talent further reinforce this role. In aviation too, India’s positioning makes it a natural connector of the skies. With its central location on key international air routes, rapidly expanding airport infrastructure, and surging passenger and cargo traffic, India is emerging as a pivotal hub in the global aviation ecosystem.
Expanding aviation landscape
The aviation sector stands at the threshold of a new era, driven by inclusion, innovation and infrastructure growth. Over the past decade, the transformation of India’s aviation landscape has been nothing short of phenomenal. Starting with 74 airports in 2014, India currently operates a staggering network of 162 airports (including heliports and water aerodromes). Guided by the Amrit Kal vision, 50 more airports are targeted for development over the next five years, while the Viksit Bharat plan envisions 350 airports by 2047.
Currently, an average of 460,000 passengers fly domestically, in comparison to 180,000 per day in 2014. Further, over the past 10 years, 60 new flights have been added every year. Flying in India today has become more accessible and more available. Further, constant efforts are being made by the ministry and the industry to make it more affordable. Indian aviation is one of the brightest spots in the global aviation landscape, with a growth of 8-10 per cent each year. Further, Indian skies are getting more competitive, collaborative and connected, with airlines witnessing consistent double-digit growth with around 240 million passengers travelling annually. By 2030, this number is projected to rise to 500 million passengers.
The aircraft fleet is also expanding. Indian carriers, which have a current fleet of around 800 aircraft, are set to add 600 aircraft to their fleet over the next five years, and have placed orders for another 1,700. India has the space for five big aircraft operators, with fleets of at least 100 each. Currently, three more airlines are required alongside IndiGo and Air India to ensure a flourishing ecosystem.
“The UDAN scheme has democratised air travel, making it accessible, affordable and available for each and every Indian.”
Connecting India through UDAN
At the heart of the sector’s growth is the revolutionary Ude Desh ka Aam Naagrik (UDAN) scheme, which has democratised air travel, making it accessible, affordable and available for each and every Indian. As of July 2025, over 15 million people have been able to fly to unserved and underserved destinations. With demand continuously growing, UDAN 2.0 has been announced with plans to connect 120 new destinations and serve 40 million passengers annually in the coming years. This is a clear invitation to global airlines to serve the rapidly growing regional transport market in India.
Growth in key segments and emerging opportunities
Sustaining growth through cargo and MRO facilities
Along with passenger movement, India’s cargo sector is also thriving, presenting significant opportunities across various industries. By 2047, the country aims to handle 21 million metric tonnes (mmt) of cargo, a sixfold increase, strengthening its position as a global logistics powerhouse. India is also becoming a key export hub for electronics, especially high-value products and other electronics. Further, the semiconductor market and electronics manufacturing industry are projected to grow, highlighting India’s expanding role in global supply chains and opening up significant opportunities for the air cargo sector.
Various ideas are flowing in to strengthen the cargo ecosystem. One of them arises from the “One District, One Product” scheme, under which each district focuses on one highlighted product. This is set to be integrated into civil aviation through the “One Airport, One Product” policy. Under this, any commodity that can be exported through air cargo will be highlighted around a specific airport, and an ecosystem will be created to enhance cargo activity around that airport.
With skilled manpower, a strategic location bridging the west and the east, and rapidly growing air traffic, India is well positioned to become a global maintenance, repair and overhaul (MRO) hub.
India’s MRO market is expanding significantly and is projected to reach $4 billion by 2031 at a CAGR of 8.9 per cent. The government has taken concrete steps to position India as a global competitive MRO hub. It has allowed 100 per cent foreign direct investment (FDI) into the sector through the automatic route, abolished royalties previously charged on MRO services and simplified tax structures with the introduction of a uniform 5 per cent GST on aircraft components. This reform alone is estimated to save the airline industry Rs 10 billion-Rs 12 billion annually.
Moreover, in the next 10-15 years, the Indian aviation industry has the potential to evolve into a $10 billion market by domestically manufacturing structural components, electronic systems and avionics. This is being further driven by the Make in India vision. Looking ahead, aircraft orders are expected to create unprecedented opportunities for manufacturers, MRO providers and lessors.
Push towards aircraft leasing and financing
Around 80 per cent of the Indian commercial aircraft fleet is being leased, which translates into an estimated $5 billion annual lease revenue opportunity for global lessors and financiers. This has further been facilitated with the landmark legislation, Protection of Interest in Aircraft Objects Act, 2025, passed recently by Parliament, which aligns with the Cape Town Convention. This law significantly reduces the risk premium for lessors and financiers, potentially lowering leasing costs by an estimated 8-10 per cent. The enactment had a great impact, with India’s aviation working group score rising by 10 points, reflecting enhanced confidence among global stakeholders. India has taken a step further in strengthening its aircraft leasing system through the Gujarat International Finance Tec-City (GIFT City), which provides an enabling ecosystem for a flourishing global leasing business.
Sustainability and passenger experience
Sustainability is a value that is deeply embedded in the Indian ethos, resonating through ancient scriptures and traditions. Today, more than 80 airports are operating on 100 per cent green energy. By the end of the year, the number is expected to reach 100. Further, with over 750 mmt of biomass available, India has the capacity to become a global leader in the production of sustainable aviation fuel, with an ambitious target of 1 per cent blending by 2027, 2 per cent by 2028 and 5 per cent by 2030, reflecting its commitment to a greener future.
India’s airport infrastructure also showcases the country’s rich heritage for travellers. Culture is being integrated into airports to help people connect with the essence of this country.
Further, the ministry has decided that every airport will feature an Udan Yatri café. First launched at Kolkata airport, the café has witnessed huge success. It has also been launched at Chennai, Pune and Ahmedabad, among others, with plans to expand to other airports as well.
DigiYatra has been a very important innovation, and is now operational at 24 airports including Delhi, Bengaluru, Varanasi and Lucknow.
Driving growth momentum through collaboration
Aviation is no longer just a mode of transport; it is a driver of transformation. Airports have emerged as the new-age nucleus of economic activity, with growth taking place whenever an airport comes up. They drive improvements in infrastructure, expansion of highways, metro lines and roads, development of hotels, real estate spaces, housing projects and industrial clusters, local tourism activity, and agricultural productivity owing to enhanced cargo movement. The linkage between civil aviation and economic growth is well established.
India’s civil aviation sector has achieved unprecedented milestones, driven by clarity, conviction and a strong commitment to connect each and every corner of the country. It is now time to strengthen the momentum through much deeper collaborations and relationships, especially with the states. States must step up and play a more proactive role in building a comprehensive and holistic aviation network across the country. Aviation is not just about moving from airport to airport, it encompasses drones, seaplanes, helicopter services and aerosports.
