- The Indian civil aviation sector has grown to become the 3rd largest in the world in terms of domestic traffic.*
- India is now a green zone where no permission is required to operate a drone. PLI scheme has been there to promote Drone manufacturing.*
- Drone market is projected to increase from INR 2900 Cr in 2020 to about INR 77,300 Cr in 2025 at a CAGR of 80% and is further expected to reach up to INR 2,95,000 Crore by 2030.*
- Under UDAN, as on 28.02.2023, 469 routes connecting 74 unserved and underserved airports including 9 Heliports & 2 Water aerodromes have been operationalized.*
- Reasons to Invest
- AAI recorded an estimated revenue of INR 10801.69 cr in F.Y. 2022-23.*
- Aircraft fleet size of the country is expected to quadruple, therefore, reaching about 2500 in number by 2038.*
- The Aerospace manufacturing and Defense sector is also expected to grow by about 5 times to reach 5 lakh crores in 2047.*
- The total freight movement at AAI have increased by 1% during the year 2022 over 2021.*
- The MRO industry is expected to grow by more than 4 times to reach around USD 4 bn in the next 3 to 5 years.*
- India’s drone manufacturing industry is expected to grow to INR 900 crores by FY 2024 from INR 60 crores in FY 2021 in terms of annual sales turnover. *
- 6000 crores a year worth employment could be created in the Drone sector. *
- The Government has set a target to operationalize 1000 UDAN routes during the currency of the scheme and to revive/develop 100 unserved & underserved airports/heliports/water aerodromes by 2024. *
- GST reduced from 18% to 5% for domestic Maintenance, Repair and Overhaul (MRO) services.*
- About INR 95,000 Cr to be Invested in the Aviation Sector in the Next Four Years (2023-27).*
- GOI aims to establish 33 new domestic cargo terminals by 2024-2025 which will allow cargo sector to flourish and grow.*
- Ministry of Civil Aviation will be spending close to INR 98,000 crores over 4 years in terms of setting up new greenfield airports and expansion of existing brownfield airports. Out of this, INR 62,000 crores will be invested by private sector and INR 36,000 crores will be invested by the Government of India through AAI.*
- The drone certification scheme is likely to create an eco-system for world class drones to be manufactured in India. The number of Type Certified prototypes may exceed 100 over the next three years. *
- Key Achievements
- The accident/ incident rate has been as negligible as 0.01% for the past five years at IGRUA.*
- There was a growth of 42.85% in Passengers Carried by Domestic Airlines and overall cancellation rate of flights has been only 0.47%.*
- Indigo and Air India have improved their On-Time Performance schedule in 2023 when compared to 2019.*
- India operates a wide ranging network of international flights and currently has Air Services Agreements with 116 countries.*
- MoCA has launched eGCA and eBCAS platforms where all functions, operational processes are being brought on computerized management command. The project has been aimed at automation of the processes and functions of DGCA for ushering in a paradigm shift from restrictive regulation to constructive collaboration. *
- During the 41st General Assembly of ICAO, India has been re-elected to the ICAO Council (2022-2025) under Part II, comprising of countries which make the largest contribution to the provision of facilities for international civil air navigation.*
- India's largest flying academy - Indira Gandhi Rashtriya Uran Akademi (IGRUA) at Amethi (Uttar Pradesh) - has been permitted to carry out pilot training in Gondia (Maharashtra) and Kalaburagi (Karnataka) to enhance its flying hours and aircraft utilisation, which get severely affected during winter months due to visibility issues.*
- Effective Implementation of India has increased to 85.49% from the previous 69.95%.*
- Recent Announcements
21st August 2023: Shri Shivraj Singh Chauhan and Shri Jyotiraditya M. Scindia lay the foundation stone of Datia Airport.
04th Aug 2023: Nearly INR 25,000 crores to be spent for growth and development of Civil Aviation sector in next 4-5 years.
06th Jul 2023: Institutional Infrastructure Strengthening in DGCA/AERA/AAI.
16th Jun 2023: Passengers carried by Domestic airlines registered an annual growth of 36.10% and monthly growth of 15.24%.
08th June 2023: Under UDAN scheme, 180 RCS airports including 25 Water Aerodromes & 40 Helipads identified for operation.
08th May 2023: Shri Jagan Mohan Reddy, CM of Andhra Pradesh, laid the foundation stone for the development of Bhogapuram International Airport. The project development will take place with three phases.
- There are 34 Flying Training Organisations (FTOs) operating at 52 bases.*
- By the end of year 2022, IGRUA has a fleet of 17 aircrafts.*
- AIASL handled 103277 flights (AI Group Flights & Alliance Air) during the year 2022.*
- AIASL handled 89182 flights of Scheduled Client Airlines during the year 2022.*
- There were 400 aircrafts in the country in 2013-14 and the number has gone up to 710 in 7 years. It is intended that more than 100 aircrafts should join every year.*
- 1748 foreign airlines flights and 1440 domestic airlines flights are connecting India globally.*
- Today, India has 21 international and 35 domestic cargo terminals.*
- Out of 17,726 registered pilots in India 2,764 pilots are women covering 15% of the total Pilots in the country which is significantly higher than the international average of 5%.*
- GOI has rapidly expanded from having 7 Cargo Freighters to 28 Cargo Freighters in a period of 3 years.*
- Annual passenger traffic increased from 2.6 lakh to 33 lakh in five years under UDAN Scheme.*
- Over 1.13 crore passengers have travelled in more than 2.16 Lakh UDAN flights.*
- Growth Drivers
- The total aircraft movement at AAI has increased by 33% during the year 2022 over 2021.*
- Despite having one less aircraft in its fleet compared to the previous year, IGRUA was able to achieve 18,620 hours of flying time in 2022.*
- The following airlines have shown an increase in their market share in March 2023 as compared March 2019: Indigo, Vistara, and Air Asia.*
- AAI has awarded 14 Water Aerodromes under UDAN across the country.*
- Cabinet approves Development of Phase I of New Greenfield Airport at Dholera, Gujarat at an estimated cost of INR 1305 crore, to be completed within 48 months. *
- Government has approved the "Revival of unserved and underserved airports" scheme at the total cost of INR 4500 crore for the revival and development of unserved and underserved airports of State Government, Airports Authority of India (AAI), Civil Enclaves, Central Public Sector Enterprises (CPSEs), Helipads and Water Aerodromes.*
- AAI and Other Airport Operators to spend INR 90,000 Cr till 2024-25 for Modernisation of airports. *
- 14 AAI Airports are now equipped with Ambulifts to facilitate flyers with reduced mobility under the Accessible India Campaign (Sugamya Bharat Abhiyan) of Government of India. *
- The Ministry of Civil Aviation and Govt. of Himachal Pradesh signed MoU for development of a Green Field Airport in Nagchala, Mandi District of Himachal Pradesh at an estimated cost of INR 900 crore excluding the cost of land with the aim to have list mile connectivity in Himachal Pradesh. *
- Government has identified 68 aerodromes for revival/upgradation under UDAN by 2024. *
- In last 8 years,the number of airports has gone up from 74 to 147 and the number is likely to cross 220 by the year 2024-25.*
- FDI Policy
- 100% FDI allowed under automatic route for both greenfields as well as brownfield projects.*
- Air Transport Services*
- Scheduled air transport service/ domestic scheduled passenger airline/ regional air transport service: Up to 49% allowed under the Automatic route beyond which Government approval is required.
- Non-scheduled air transport services and helicopter services, seaplane services which require DGCA approval: 100% FDI allowed under the Automatic Route.
- Other Services Under the Civil Aviation Sector*
- Ground handling services, maintenance, repair and overhaul services, flying institutes, technical training institutions: 100% FDI allowed under the Automatic Route.
- The cumulative FDI equity inflow in Air Transport (including Air Freight) is USD 3.76 bn during the period April 2000 to March 2023.*
- Production Linked Incentive (PLI) Scheme
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme for drones and drone components to catalyse super-normal growth in the upcoming drone sector.
Ministry of Civil Aviation disbursed about INR 30 crores during FY 2022-23 under PLI Scheme for Drones and Drone Components. *
Financial Outlay- INR 120 crore
For more details on PLI Schemes
- Sector Policy
- UDAN (Ude Desh ka Aam Nagrik) scheme was launched to transport experts and equipment to every corner of the country (NER, hilly and island states).
- Under Udan – As of February 2023, 469 routes connecting 74 unserved and underserved airports including 9 heliports and two water aerodromes have been operationalised. *
- INR 2433 cr has been released to selected Airlines Operators as Viability Gap Funding. *
- RCS-UDAN was launched to Promote air connectivity to unserved and underserved airports in Tier-II and Tier-III cities to stimulate regional growth and provide affordable air travel to the citizens.
- AAI has awarded 948 valid routes to Selected Airline Operators (SAOs) across the length and breadth of the country involving 154 RCS airports including 14 water aerodromes and 36 helipads.
- As on 27th January 2023, after four rounds of bidding under UDAN, 59 routes have commenced, operationalizing 72 Airports including 2 Water Aerodrome &9 Heliports. *
- 100 routes are awarded in North East alone, & 50 are already operational.
- Under UDAN Scheme more than 900 new routes have been approved, 350 routes already functional. More than 50 new airports or those which were not in service earlier, have been made operational.
- 168 routes awarded during the year under UDAN 4.1.
- More than 2.15 lakh UDAN flights have operated and over 1.1 crore passengers have availed the benefits in UDAN flights as on 30th November 2022.*
International Air Connectivity Scheme (IACS)*
- The Ministry of Civil Aviation has launched International Air Connectivity Scheme (IACS) scheme (International Ude Desh ka Aam Nagrik(UDAN) with an objective to enhance air connectivity from certain States of the country with selected international destinations to promote socio-economic growth.
- The State Government of Assam, Manipur and Tripura have identified routes connecting Guwahati, Imphal and Agartala with selected international destinations viz. Bangkok, Dhaka, Kathmandu, Yangon, Hanoi, Mandalay, Kunming & Chittagong.
Krishi Udaan - Airlifting agri-produce for better value realisation for farmers*
- Krishi UDAN 2.0 is released on 27th October 2021 - lays out the vision of improving value realization through better integration and optimization of Agri-harvesting and air transportation and contributing to Agri-value chain sustainability and resilience under different and dynamic conditions.
- Under the scheme, full waiver of Landing, Parking, TNLC, and RNFC charges for Indian freighters and P2C has been implemented at 25 airports from NER, Hilly and Tribal region and 28 airports from remaining parts of the country.
- 58 airports covered under Krishi Udan Scheme 2.0.
- Krishi Udan Scheme is a convergence scheme where eight Ministries/Departments namely Ministry of Civil Aviation, Department of Agriculture & Farmers' Welfare, Department of Animal Husbandry and Dairying, Department of Fisheries, Ministry of Food Processing Industries, Department of Commerce, Ministry of Tribal Affairs, Ministry of Development of North-eastern Region (DoNER) would leverage their existing schemes to strengthen the logistics for transportation of Agri-produce.
- A total of 1,08,479 Metric Tonne perishable cargo (International + Domestic) was handled in Financial Year 2021-22 (till 28 February 2022) in comparison to 84,042 Metric Tonne handled in Financial Year 2020-21 at AAI airports.
National Air Sports Policy (NASP 2022)*
- National Air Sport Policy 2022 (NASP 2022) is launched which lays out the vision of making India as one of the top sports nations by 2030, by providing a safe, affordable, accessible, enjoyable and sustainable air sports ecosystem in India.
- The policy will cover the following air sports in India: -
- Aero modeling and model rocketry
- Amateur-built and experimental aircraft
- Gliding and powered gliding
- Hang gliding and powered hang gliding
- Parachuting (including skydiving, BASE jumping and wing suits etc.)
- Paragliding and para motoring (including powered parachute trikes etc.)
- Powered aircraft (including ultra light, micro light and light sports aircraft etc.)
- Rotorcraft (including autogyro)
- Key Objectives of NASP 2022:-
- Promote an air sports culture in the country
- Enable adoption of international good practices in safety including but not limited to, air sports infrastructure, equipment, operations, maintenance and training
- Develop a simple, stakeholder-friendly and effective governance structure
- Enhance participation and success of Indian sportspersons in global air sports events; and
- Promote design, development and manufacturing of air sports equipment in India in line with the Atmanirbhar Bharat Abhiyan.
Small Aircraft Sub-Scheme*
Primary objective is to facilitate and stimulate regional air connectivity by creating a growth-oriented framework with a specific focus on operations through small aircrafts (including seaplanes). The Scheme intends to facilitate creation of an ecosystem for small aircraft operations in the country by providing the framework necessary for bringing together relevant stakeholders such as States, airlines, airport operators and policy makers to collaborate towards the success of this initiative.
Government policies related to drones in the country*
- Liberalised Drone Rules, 2021
- Drone Airspace Map for opening up nearly 90% of Indian airspace as a green zone for drone flying up to 400 feet
- Production-Linked Incentive (PLI) scheme for drones
- UAS Traffic Management (UTM) Policy Framework
- Monetary grant program for the purchase of agricultural drones
- Drone certification scheme
- Drone import policy that aims at banning import of foreign drones and freeing up import of drone components
- Drone (Amendment) Rules, 2022 abolishes the requirement of a drone pilot licence. The remote pilot certificate issued by a DGCA-authorised drone school is adequate for operating drones.
- Financial Support
UNION BUDGET 2023-24
- The total budgetary allocation for FY 2023-24 towards the Ministry of Civil Aviation is INR 3113.36 cr
The Government is providing a total incentive of INR 120 crore spread over three financial years starting 2021-22. The incentive for 2021-22 will be payable in 2022-23 after scrutiny of the financial results of the beneficiaries.*
- Investment Opportunities
- Indian carriers are projected to increase their fleet size to 1,100 aircraft by 2027.18
- Demand for MRO facilities is increasing in India due to consistent double-digit growth in the aviation sector.
- Investment opportunities worth USD 3 Bn in greenfield airports under PPP mode at Navi Mumbai (Maharashtra) and Mopa (Goa).
- For the development of the aviation industry in the North-East States, AAI plans to develop Guwahati as an inter-regional hub. It also plans to develop Agartala, Imphal and Dibrugarh as intra-regional hubs.
- Indian airports are emulating the Special Economic Zone (SEZ) Aerotropolis model to enhance revenues. The model focuses on revenues from retail, advertising, vehicle parking, security equipment and services.
- AAI has taken up developmental projects worth around INR 25,000 crores over the next five years for expansion and modification of existing terminals, new terminals, expansion or strengthening of existing runways, aprons, air navigation services, control towers, technical blocks etc.
- Three Public Private Partnership (PPP) airports at Delhi, Hyderabad and Bengaluru have undertaken developmental projects to the tune of INR. 30,000 Crores by 2025.
- GOI's vision is to make India one of the top air sports nations by 2030. The mission is to provide a safe, affordable, accessible, enjoyable and sustainable air sports ecosystem in India.
- Noida International Greenfield Airport at Jewar, Uttar Pradesh will bring about all-around development of the industrial infrastructure in the region, increase employment opportunities and encourage manufacturing and export.
- Sector Reports
- Foreign Investors
- Airbus (France)
- Boeing International Corporation (US)
- AirAsia (Malaysia)
- Rolls Royce (UK)
- Frankfurt Airport Services Worldwide (Germany)
- Honeywell Aerospace (US)
- Malaysia Airports Holdings Berhad (Malaysia)
- GE Aviation (US)
- Airports Company South Africa Global (South Africa)
- Alcoa Fastening Systems Aerospace (US)
- Singapore Airlines (Singapore)
- Etihad Airways (UAE)
- Fairfax (London)
- Union Budget Speech 2020-21, https://www.indiabudget.gov.in/doc/Budget_Speech.pdf
- “Regional air connectivity infrastructure gets a boost,” PIB website: Cabinet Committee on Economic Affairs (CCEA), http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1567744
- Comprehensive Skill Gap Analysis and Future Road Map for Skill Development in Civil Aviation Sector, Ministry of Civil Aviation,
- “Potential and Challenges of Indian Aviation,” IATA,
- “SECTOR SPECIFIC CONDITION FOR FDI,” Invest India, https://www.investindia.gov.in/foreign-direct-investment
- Consolidated FDI Policy, https://invest-india-revamp-static-files.s3.ap-south-1.amazonaws.com/2020-04/FDI%20Policy%202019%20revised_19%20April%202020.pdf
- Consolidated FDI Policy, https://invest-india-revamp-static-files.s3.ap-south-1.amazonaws.com/2020-04/FDI%20Policy%202019%20revised_19%20April%202020.pdf
- “Cabinet approves leasing out six airports,” Ministry of Civil Aviation, PIB, http://pib.nic.in/PressReleseDetail.aspx?PRID=1561472
- “Nabh Nirman initiative announced to expand Airport Capacity,” Ministry of Finance, PIB, http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1518555
- “MRO Facilities for Aviation Sector,” Ministry of Civil Aviation, PIB, http://pib.nic.in/newsite/PrintRelease.aspx?relid=160226
- “National Civil Aviation Policy 2016,” Ministry of Civil Aviation,
- PIB, https://pib.gov.in/PressReleasePage.aspx?PRID=1666421
- PIB, https://pib.gov.in/PressReleseDetailm.aspx?PRID=1667654
- PIB, https://pib.gov.in/PressReleasePage.aspx?PRID=1668346
- PIB , https://www.pib.gov.in/PressReleasePage.aspx?PRID=1671442
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1688549