The civil aviation industry in India has emerged as one of the fastest-growing industries in the country during the last three years. India has become the third-largest domestic aviation market in the world and is expected to overtake the UK to become the world’s third-largest aviation market by 2024. With a market size of US$ 16 billion, the country is the tenth-largest civilian aviation market.

India is expected to overtake China and the United States as the world's third-largest air passenger market in the next ten years, by 2030, according to the International Air Transport Association (IATA).

Passenger traffic stood at 327.28 million and aircraft movements reached 2.5 million in FY23.

According to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflow in India’s air transport sector (including air freight) reached US$ 3.73 billion between April 2000-December 2022.

In October 2022, Prime Minister Mr. Narendra Modi laid the foundation stone of the C-295 Aircraft Manufacturing Facility in Vadodara, Gujarat.

In the Union Budget 2023-24, Rs. 3,113.36 crore (US$ 376 million) have been allocated to the Ministry of Civil Aviation.

In October 2021, the Union Minister of Civil Aviation, Mr. Jyotiraditya M. Scindia, virtually flagged off the first direct flight along the Shillong–Dibrugarh route, under the RCS-UDAN (Regional Connectivity Scheme - Ude Desh Ka Aam Naagrik) scheme.

AAI plans to invest Rs. 25,000 crore (US$ 3.58 billion) in next the five years to augment facilities and infrastructure at airports.

The government will spend about Rs. 98,000 crore (US$ 12 billion) by 2025 to boost regional connectivity.

In the Union Budget 2023-24, it was announced that 50 additional airports, heliports, water aerodromes, and advanced landing grounds will be revived for improving regional air connectivity in the country.

Investment to the tune of Rs. 42,000-45,000 crore (US$ 6-6.5 billion) is expected in India’s airport infrastructure between 2018-2023.

In October 2021, Tata Sons won the bid to acquire state-run Air India by offering Rs. 18,000 crore (US$ 2.4 billion) to acquire 100% of shares.

The Government has set a target to operationalize 1,000 UDAN routes and to revive/develop 100 unserved & underserved airports/heliports/water aerodromes (including 68 aerodromes) by 2024.

The AAI has announced a few developments in Indian Airports - construction of a new airport on a greenfield site in Hollongi (Arunachal Pradesh) by November 2022, new integrated passenger terminal building expansion of Tiruchirappalli & Pune Airport (March 2022), Guwahati International Airport (June 2022), Maharaja Bir Bikram Airport (Early 2021) and a major expansion of Surat Airport (December 2021). On May 08, 2021, AAI commenced commercial operations at Rupsi airport—Northeast India’s 15th airport and Assam’s 7th airport.

The road ahead poses strong opportunities for the aviation sector.

India’s aviation industry is largely untapped with huge growth opportunities, considering that air transport is still expensive for the majority of the country’s population, of which nearly 40% is the upwardly mobile middle class.