India's civil aviation market is set to become the world’s third largest by 2020.
International passenger traffic registered a compound annual growth rate (CAGR) of 10.5 per cent over FY06-12 and is expected to touch 60 million by FY17. Domestic passenger traffic registered a CAGR of 15.6 per cent during FY06-12 and is expected to reach 209 million by FY17. Moreover, the total freight traffic expanded at a CAGR of 8.5 per cent over FY06-12; it stood at 2.26 million tonnes (MT) in FY12. During FY07-12, India’s exports expanded at a CAGR of 20.6 per cent to reach US$ 211.3 billion. Growing trade augurs well for airports as they handle about 30 per cent of India's total trade (by value).
The increasing growth in the sector is accentuating demand for maintenance, repair and overhaul (MRO) facilities. By 2020, MRO industry is likely to touch US$ 1.3 billion from the current level of US$ 0.5 billion.
The Government of India (GOI) has allowed 100 per cent foreign direct investment (FDI) under automatic route for greenfield projects. The Ministry of Civil Aviation has approved annual planned outlay of US$ 1.6 billion for FY14 for the development of airport infrastructure.