One of the growing sectors of the Indian economy is the aviation sector. It is the world's ninth largest civil aviation market and ranks fourth in domestic passenger volume. The civil aviation market in India is all set to become the world's third largest by 2020.
In India's airports sector, total freight traffic registered a compound annual growth rate (CAGR) of 6.6 per cent over FY06-13. Domestic freight traffic increased at a CAGR of 7.1 per cent in the same period, while international freight traffic rose at 6.2 per cent. Total freight traffic registered 2.1 million tonnes (MT) in FY14, with domestic freight traffic touching 0.8 MT and international freight traffic 1.3 MT.
The Government of India has ably supported the airport sector and has focused on improving the infrastructure by planning to develop 100 low cost airports. The government has also increased liberalisation and started the open sky policy to further provide a boost to this sector. It has allowed 100 per cent foreign direct investment (FDI) under automatic route for Greenfield projects and 49 per cent FDI for foreign carriers.
By 2020, the sector is expected to be the third largest aviation market globally with passenger traffic at Indian airports anticipated to increase to 450 million from 159.3 million in 2012-2013. Also, the repair and operations (MRO) business in India, which is currently worth US$ 500 million is estimated to grow over US$ 1.5 billion by 2020.
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