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Indian Economy Overview

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Airports: Jul 2010

July, 2010

Air traffic in the country has grown substantially over the past few years with the gradual liberalisation of air services and introduction of low-cost airlines. Presently, India has 136 airports, of which 94 are owned by the Airports Authority of India (AAI). Of 136 airports in India, 82 are operational. The freight traffic handled by Indian airports increased at a compound annual growth rate (CAGR) of 9.7 per cent between 2003–04 and 2008–09. Aircraft movement at Indian airports increased at a CAGR of 15.4 per cent between 2003–04 and 2008–09.

Under the Eleventh Plan, the government expects an investment of around US$ 6.5 billion (INR 309.7 billion) for the development of airport infrastructure. Five international airport projects have been undertaken under the public-private partnership (PPP) mode —the development of Cochin, Hyderabad and Bengaluru international airports and the modernisation of Delhi and Mumbai international airports. The AAI is also upgrading and modernising 35 non-metro airports in the country, including those at Agra, Ahmedabad, Amritsar, Bhopal, Jaipur, Pune and Goa, at an estimated cost of around US$ 1 billion (INR 46.6 billion).

The government is encouraging private investment in the sector and has approved the policy for greenfield airports in April 2008, to enable the development of greenfield airports on the PPP mode. It has also allowed 100 per cent foreign direct investment (FDI), under the automatic route, for greenfield airports. Further, it has allowed 100 per cent tax exemption on airport projects for a 10-year period.

Sectoral Presentation (April 2010)

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